Kevin McCoy

USA TODAY

A federal appeals court on Friday rejected health insurance giant Anthem’s legal bid to reverse a lower court ruling that blocked its takeover of industry rival Cigna.

The U.S. District Court that blocked the $48 billion merger in February on anti-trust grounds “did not abuse its discretion in enjoining the merger” based on Anthem’s failure to show that extraordinary efficiencies would compensate for a loss of market competition, a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled in a 2-1 decision.

Anthem to appeal judge's ruling to block Cigna acquisition

The decision appeared likely to end the two-year effort to finalize a corporate tie-up between Indianapolis-based Anthem, the nation’s second-largest health insurer, and Bloomfield, Ct.-based Cigna, the third-largest.

Shares of Anthem (ANTM) were down 0.32% at $177.73 in afternoon trading, while shares of Cigna (CI) were 0.05% higher at $156.29.

The companies remain in Delaware Chancery court with competing lawsuits filed after the February decision.

Anthem's legal action has sought a restraining order to block Cigna from terminating the merger. Anthem also has accused Cigna of trying to sabotage the merger agreement.

Antitrust trial over Anthem-Cigna merger begins

For its part, Cigna has sought a court declaration confirming its legal right to cancel the transaction. The company has also sought the $1.85 million reverse termination fee that was part of the merger agreement, plus more than $13 billion in additional damages from Anthem.

The Delaware court has stopped Cigna from canceling the merger pending the results of a May 8 hearing, according to a Bloomberg News report. Anthem plans to ask the court to keep the order in effect until the competing lawsuits are decided, the report said.

Anthem Cigna Appeal Decision

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc