Familiar culprit holds up Anthem-Cigna deal
When it comes to corporate megamergers, economics are easy but egos are hard.
"The economics is a math issue, and can make all the sense in the world. But turf is another issue," said
"Where's the headquarters going to be? How's management going to be integrated at the C level? Who's going to be in charge of what? It's all of those things," Hilbert said. "The more significant a deal is, the more these issues hit the spotlight."
It's exactly those issues that appear to have stalled the Anthem-Cigna marriage.
Anthem and
According to Swedish's telling of events,
Anthem countered by insisting that Swedish remain CEO for two years, after which he would step down, but offered to make Cordani president and chief operating officer for that span.
Before Cordani would agree to that, he wanted to be guaranteed the CEO job after Swedish's departure. But Anthem's board refused to do that.
"We were stunned that the Cigna Board continues to insist on a guaranteed CEO position for
Anthem raised its price four times from
But in its final offer, Anthem actually pulled back on its promises for
That sparked Cordani and
"Your insistence that one person (
They added, "Your proposal raises very serious questions regarding your views on proper governance, board oversight and risk management and underestimates the complexity of combining our organizations."
So during Anthem's conference call, Gupte asked, "Might there be any concessions at all going back to your original proposal of a co-chair on the integration committee and perhaps granting the
Swedish answered, "Yes, I think that is a question that we continue to ask ourselves."
He also tried to sound a conciliatory tone about Cordani and his team of managers, saying, "I have a great deal of respect not only for the CEO of [
Impact on headquarters?
Whether the tussle between the CEOs could affect where the combined company has its headquarters is unclear. Neither company has publicly mentioned that as an issue. Anthem spokeswoman
Of course,
"Where the CEO lives is pretty important for that city," said Hilbert, the former Conseco CEO. "It just works out that way. It's human nature."
Anthem swelled in size over the last 15 years by acquiring 13 of its
That created some tricky situations. For example, when Anthem made its biggest acquisition - its
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"Those of us who built the company were really hoping to build a big company here in
Anthem now employs 4,900 people in
Fiercely competitive
Some past mega-deals among
Rogers pulled the same trick when he engineered the sale of
Neither Swedish nor Cordani is a stranger to getting big deals done. Just months before being named Anthem's CEO in early 2013, Swedish, then CEO of the
Cordani spent
Both men are fiercely competitive. Swedish is an avid fly fisherman, traveling to the rivers of
"The bigger the fish, the better," Swedish told IBJ shortly after joining Anthem.
For his part, Cordani has completed more than 125 triathlons, according to
"I'm sure both of them could lay out a brilliant analysis of what should happen," Hilbert said. "They're both great companies. They've both got great managers. They call it a merger of equals, but somebody isn't going to be equal."
Position: CEO of
Age: 64
Career: CEO of
Education: bachelor's from University of
Family: wife, Gene, and three grown children
Source: IBJ research
Position: CEO of
Age: 49
Career: consultant for
Education: bachelor's from
Family: wife, Sherry, and two young children
Source:
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