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Cigna and Humana reportedly in merger talks

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Nov 29, 2023

The Cigna Group headquarters in Bloomfield, Connecticut, US. Photographer: Joe Buglewicz/Bloomberg via Getty Images

Publicly traded health insurers Cigna and Humana are in talks to merge, the Wall Street Journal reported, citing sources familiar.

Why it matters: The combined company would create a powerful force in health insurance — a sector that hasn't seen major M&A moves in several years.

Details: The companies are discussing a stock-and-cash deal that could be finalized by the end of the year, presuming talks don't dissolve, WSJ reports.

  • The combination would be huge: Cigna's market value at time of writing stands at $78 billion, while Humana's is roughly $60 billion.
  • A tie-up between Cigna and Humana would give the combined company scale to rival both UnitedHealth Group and CVS Health.

By the numbers: Cigna reported about $181 billion in revenue last year, while Humana booked about $93 billion in 2022.

Zoom in: Cigna, through its $67 billion acquisition of Express Scripts in 2018, has a powerful pharmacy benefit business, along with a strong commercial insurance foothold.

  • Cigna was reportedly selling its relatively small Medicare Advantage unit (600,000 covered lives as of September), per Reuters — a move one health care banker tells Axios was likely a prelude to jumping on Humana.
  • Humana has a strong position in Medicare Advantage, but has been exiting commercial markets over the last year.

Flashback: Nearly 10 years ago, Cigna attempted a different mega-merger — a proposed $54 billion combination with fellow insurer Anthem (now Elevance) that ultimately failed after regulators opposed the deal.

💭 Our thought bubble: The marriage looks good on paper and both parties have clearly been paving the way with selective divests — but whether it's enough for a hard-nosed FTC is another question.

The bottom line: As health care costs continue to rise, the deal is certain to attract antitrust scrutiny.

  • Humana declined to comment. Cigna did not return Axios' immediate request for comment.

Editor's note: This story has been corrected to note WSJ reported a deal could be struck by year-end, not closed.

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