Nov 30, 2023 - Business
Ho-hum reception
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A potential Cigna-Humana tie-up may make a lot of business sense. But neither company's investors seem too excited about the idea, Axios' Pete Gannon writes.
Zoom in: Humana is largely a pure play in the Medicare Advantage insurance market and enjoys a higher trading multiple that reflects its growth prospects in that space. Its investors haven't appeared excited about giving that up.
- Cigna, the larger company, is focused on the commercial market. Its investors could be worried about dilution in a cash and stock deal and overpaying for Humana's higher-multiple business.
What we're watching: One big factor to watch in any M&A deal is antitrust scrutiny.
- On this one, it's any regulatory concern about the companies' respective pharmacy benefit management businesses, or PBMs, Axios' Tina Reid writes.
