Cigna Corp.’s $48 billion acquisition by Anthem may not close until 2017, despite recent assurances by Anthem CEO Joe Swedish that the deal was on track to be finalized later this year.

“While the company continues to work toward achieving regulatory approval as quickly as possible and to target a closing date in the second half of 2016, the closing will ultimately be subject to the approval and timing of the regulators,” Cigna said in its quarterly 10-Q filing with the U.S. Securities and Exchange Commission. “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.”

Wells Fargo analyst Peter Costa said Cigna’s carefully worded statement indicates that the deal could be delayed or not approved at all, Bloomberg reported. “The 10Q deal timing disclosure is a significant item that likely widens the spread.” 

Cigna reported revenue of $9.88 billion for the first quarter, up 4.3 percent over the first quarter of 2015. Pre-tax income declined 4.1 percent to $819 million. Cigna said its medical customer base increased by 130,000 in the first quarter of 2016 to a total of 15.1 million customers.

Our Take: At issue here is Bill Baer, a high-ranking member and rising star of the U.S. Justice Department. In March, Baer told a Senate subcommittee that the proposed payer mega-mergers have the potential to reshape the insurance industry.

“These are transformational mergers in a number of markets, including Medicare Advantage and commercial insurance,” Baer said.

Considering that the number of large payers would shrink from five to three, Baer opined: “That’s a game changer that demands merger law enforcement officials to scrutinize very, very carefully to make sure we aren’t making a mistake in which shareholders benefit and the consumers pay the cost.”

Anthem has a powerful incentive to ensure that the deal goes through. According to Cigna’s 10-K filing, if regulators prevent the merger and their decision is final and non-appealable, or if the merger hasn’t closed by Jan. 31, 2017, Anthem is required to pay a $1.85 billion termination fee.

We’re not so sure, however, about Cigna. In 2015, the company reported $2.3 billion in net income, a 10 percent increase over 2014, on $37.9 billion in revenue, an 8 percent increase over 2014. In the last year it has added about 40 new commercial ACO contracts. These are modest but important indications that the company has continued to grow its business without Anthem’s help.

Regardless, it’s impossible to know with any certainty whether the language included in the 10-K was customary or a warning shot leveled at Anthem that the deal might not happen.

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