Influential advisory firm backs Anthem-Cigna combination

The prominent proxy advisory firm Institutional Shareholder Services has backed Anthem Inc.'s planned, $48 billion acquisition of fellow health insurer Cigna Corp.

Anthem said Monday that ISS recommends that its shareholders approve issuing Blue Cross-Blue Shield insurer's stock as part of that deal. Anthem's shareholders will vote on Dec. 3.

Indianapolis-based Anthem said in July that it would pay $103.40 per share in cash and a portion of its stock for each Cigna share in a deal valued at $54.2 billion, counting debt. The deal is contingent in part on Anthem shareholders, who will own about two-thirds of the combined company, approving the issuance of shares.

Anthem announced its deal shortly after two other big insurers, Aetna Inc. and Humana Inc., laid out plans to combine in an acquisition worth roughly $35 billion.

These big acquisitions still must pass the review of state and federal regulators before they can close next year, and the combinations have drawn some concern over their potential impact on competition. Anthem Inc.'s combination with Bloomfield, Connecticut-based Cigna Corp. would create the nation's largest health insurer based on enrollment. Aetna already is the third-largest insurer.

The American Medical Association last week asked the Department of Justice to block both deals, citing concerns about consumer access to health care and doctor leverage in contract negotiations with the insurers.

But the leaders of both Anthem and Aetna have told Congress that the deals won't stifle competition because the combined businesses largely complement each other. Insurers have said these combinations can help them save money by cutting overlapping costs and improving their technology, which is becoming more important in monitoring patient health and helping customers find care.

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