Cigna, Humana shares fall after report health-care giants are in talks to merge

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 instantly reply to CNBC’s request for touch upon the report from The Wall Avenue Journal, which cited folks conversant in the matter. A Humana spokesperson declined to remark.

The businesses are discussing a stock-and-cash deal that could possibly be finalized by the top of this yr, the folks advised the Journal. 

A merger can be a mega deal. Cigna’s market worth sat at roughly $77 billion on Wednesday and Humana’s was practically $60 billion, making them two of the nation’s largest well being insurers.

Shares of Cigna closed 8% decrease Wednesday, whereas Humana’s inventory closed greater than 5% decrease.

The rumored deal comes after stories earlier this month that Cigna was exploring a sale of its Medicare Benefit enterprise, which manages authorities medical health insurance for folks age 65 and older. A Cigna spokesperson on the time stated the corporate doesn’t touch upon “rumors or hypothesis.” 

Some analysts have recommended {that a} potential mixture with Humana could possibly be a cause for Cigna to dump its Medicare Benefit enterprise. Taking away that enterprise might probably mood antitrust considerations for such a merger, Scott Fidel, well being care inventory analyst at Stephens, wrote in a observe earlier this month, in response to STAT Information. 

“We might see this motion being one part of a possible pursuit of Humana as an acquisition goal, with the divestiture being a proactive transfer to scale back antitrust danger,” Fidel stated.

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