Cigna, Humana explore healthcare megamerger - WSJ
Cigna (NYSE:CI) and Humana (NYSE:HUM) are in talks to combine in a stock-and-cash deal, the Wall Street Journal reported Wednesday afternoon citing people familiar with the matter. A deal to merge could be finalized by the end of the year, it was added.
The news sent shares of both health-insurance companies lower in mid-day trading, with Cigna last trading down 5.9% and Humana down 1.5%.
If an agreement is reached, the merged company would rival UnitedHealth Group (NYSE:UNH) and CVS Health (NYSE:CVS) in size.
Cigna had revenue of about $181 billion last year, while Humana posted revenue of $93 billion.
In 2015, Cigna and Humana considered merging, yet Humana opted for a deal with Aetna. However, this alliance faced antitrust issues and was blocked by a judge. Consequently, Aetna was acquired by CVS in 2018. Another attempt to merge Cigna with Anthem, rebranded as Elevance Health Inc (NYSE:ELV), also fell through due to an unfavorable antitrust ruling.
To alleviate antitrust worries, Cigna is considering selling its current Medicare Advantage division, potentially bringing in billions through this divestment.
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