(Bloomberg) -- Cigna Corp. rejected Anthem Inc.’s $47 billion takeover bid, saying it was inadequate, not in the best interests of shareholders and that Anthem’s management wasn’t fit to lead a merged insurance giant.

Anthem on Saturday offered to buy the smaller health insurer in what would be the biggest takeover ever in a U.S. industry on the verge of major consolidation. Insurers such as Anthem are searching for ways to cut costs and keep expanding profits amid a surge in enrollment from Obamacare and new rules from the law.

Unlike the drug industry, where big pharmaceutical manufacturers have gobbled up smaller biotechnology companies, Anthem and Cigna are well-established companies with their own strategies. That means that while there will be takeovers, they won’t happen without a struggle.

A major sticking point between Anthem and Cigna is who would lead a combined company. Anthem Chief Executive Officer Joseph Swedish wants to stay in control for two years. Cigna CEO David Cordani says Anthem hasn’t sorted out its growth strategy and Swedish hasn’t been able to handle problems at the insurer, like a large data breach by hackers in February. Cordani and Chairman Isaiah Harris Jr. also questioned whether the deal could pass antitrust scrutiny.

As a result, Cigna’s board “unanimously determined the proposal is inadequate and not in the best interests of Cigna’s shareholders,” Cordani and Harris wrote in a letter to Anthem on Sunday.

Anthem Statement

Anthem today reiterated its commitment to completing a transaction. The company said it plans to hold a conference call at 11 a.m. New York time to discuss the deal.

The non-binding proposal is for $184 a share, about 31 percent of which would be paid in Anthem shares and the rest in cash. That’s a 29 percent premium to Cigna’s average closing price in the past 20 trading sessions. Anthem said Saturday that the total transaction value is $53.8 billion, including net debt.

The merged entity would be about 24 percent owned by Cigna shareholders and would serve about 53 million members.

The industry has seen other deals in the works in recent weeks.

Aetna Inc. made a takeover proposal to Humana Inc. in the past few days, the Wall Street Journal reported on Saturday, without saying where it got the information. Humana had a market value of $30.3 billion on Friday, compared with Aetna’s $43.3 billion.

Anthem said Saturday that combining with Bloomfield, Connecticut-based Cigna would boost adjusted earnings by more than 10 percent in the first year. Together, they’ll generate more than $115 billion in annual revenue.

A $53.8 billion enterprise value for Cigna would be about 14 times what the company earned before interest, taxes, depreciation and amortization in the past 12 months. That’s more than double Anthem’s own Ebitda multiple.

Anthem Letter

“This combination is the absolute best strategy for both organizations to maximize the potential and lead the transformation of the health care industry,” Swedish said in the statement.

Anthem said it had held discussions with Cigna about a merger since August 2014 and has made four written proposals this month, starting with an offer of $174 a share on June 3. It made its latest bid public after the talks hit a snag over who will run the company and who will serve on the board. Anthem said it offered to name Cigna’s Cordani, as president and chief operating officer of the combined entity, as well as co-chairman of the integration team. But Cigna insisted on Cordani remaining CEO, Anthem said.

On Sunday, Cigna said Anthem’s proposal that Swedish, take on four roles including chairman and president, is “disconcerting and risky.”

Negotiations

Cigna’s management has a duty to put the interest of investors before their self-interests, said Erik Gordon, a professor at the University of Michigan business school, in an e-mail Sunday.

“The CEO should not be negotiating to keep his job and the board should not be bargaining to keep their positions, pay and perks,” he said.

UBS AG is working as Anthem’s financial adviser, and White & Case LLP is its legal counsel. Cigna’s financial adviser is Morgan Stanley and Cravath, Swaine & Moore LLP is providing legal advice.

The entire health-care industry has been on a takeover spree, from medical-device companies and drug makers to hospitals. A record $330 billion of mergers and acquisitions were announced in the industry last year, and 2015 is already on pace to top that level, data compiled by Bloomberg show.

--With assistance from Zachary Tracer in New York.

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