The Cigna Group headquarters in Bloomfield, Connecticut, on Oct. 27, 2023.
BlooJoe Buglewicz | Bloomberg | Getty Images
Shares of Cigna and Humana slid Wednesday after a report that the 2 health-care giants are in talks to merge.
A Cigna spokesperson didn’t immediately reply to CNBC’s request for comment on the report from The Wall Street Journal, which cited people conversant in the matter. A Humana spokesperson declined to comment.
The businesses are discussing a stock-and-cash deal that may very well be finalized by the top of this 12 months, the people told the Journal.Â
A merger could be a mega deal. Cigna’s market value sat at roughly $80 billion on Wednesday and Humana’s was around $63 billion, making them two of the nation’s largest health insurers.
Shares of Cigna fell greater than 7% Wednesday, while Humana’s stock dropped greater than 3%.
The rumored deal comes after reports earlier this month that Cigna was exploring a sale of its Medicare Advantage business, which manages government medical health insurance for people age 65 and older. A Cigna spokesperson on the time said the corporate doesn’t comment on “rumors or speculation.”Â
Some analysts have suggested that a possible combination with Humana may very well be a reason for Cigna to dump its Medicare Advantage business. Removing that business could potentially temper antitrust concerns for such a merger, Scott Fidel, health care stock analyst at Stephens, wrote in a note earlier this month, in accordance with STAT News.Â
“We’d see this motion being one component of a possible pursuit of Humana as an acquisition goal, with the divestiture being a proactive move to cut back antitrust risk,” Fidel said.
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