May 6, 2016 / 4:36 PM / 2 years ago

Cigna says Anthem deal could close in 2017; Anthem sticks to 2016

NEW YORK (Reuters) - Health insurer Cigna Corp (CI.N), which announced plans to be bought by larger Anthem Inc (ANTM.N) 10 months ago, on Friday said the deal may close in 2017 rather than 2016 due to the complexity of the regulatory process, according to a filing with the Securities and Exchange Commission.

The office building of health insurer Anthem is seen in Los Angeles, California February 5, 2015. REUTERS/Gus Ruelas/File Photo

The U.S. Department of Justice is currently reviewing the Cigna-Anthem deal, which would create the nation’s largest health insurer, offering Medicare, Medicaid and commercial health insurance.

The Justice Department is reviewing that deal in conjunction with Aetna Inc’s (AET.N) proposed purchase of Humana Inc (HUM.N), which was also announced last summer. Ever since the deals were announced, investors have worried that one or both may not close because of antitrust issues.

Anthem has not changed its expectations, Anthem spokeswoman Jill Becher said in a statement.

“Although our merger agreement with Cigna gives us until April 30, 2017 to obtain regulatory approvals, we continue to believe that we will obtain such approvals and close in the second half of 2016,” she said.

Cigna said in the filing that it continues to target closing in the second half of 2016 but that the closing hinges on regulators’ timing and approval.

“In light of the complexity of the regulatory process and the dynamic environment, it is possible that such approvals may not be obtained in 2016,” Cigna said in its first quarter financial filing on Friday.

In a February regulatory filing it said that the merger was expected to close in the second half of 2016.

A Cigna spokesman declined to comment beyond the filing.

Shares in Cigna, which also reported first quarter earnings on Friday, fell 2 percent to $2.64 in midday trading. Anthem shares fell 0.4 percent to $136.55.

Reporting by Caroline Humer, additional reporting by Lance Tupper; Editing by Cynthia Osterman

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