Recently, the Delaware Court of Chancery declined to award damages in connection with a failed merger between Anthem, Inc. and Cigna Corporation, despite a finding that Cigna had breached its obligations under the Merger Agreement. In re Anthem-Cigna Merger Litigation, 2020 WL 5106556 (Del. Ch. Aug 31, 2020). While the evidentiary record in the case is vast and the decision runs to more than 300 pages, in reaching its conclusion, the Chancery Court analyzed a number of contractual elements that are common in modern merger transactions and highlighted several important concepts that parties to merger agreements should keep in mind moving forward.

This article begins by discussing the relevant factual background of In re Anthem-Cigna and then proceeds to discuss three takeaways that companies should keep in mind for future transactions.