The Cigna League headquarters in Bloomfield, Connecticut, on Oct. 27, 2023.
BlooJoe Buglewicz | Bloomberg | Getty Images
Shares of Cigna and Humana slid Wednesday after a despatch that the two health-care giants are in talks to merge.
A Cigna spokesperson did not immediately respond to CNBC’s request for comment on the gunshot from The Wall Street Journal, which cited people familiar with the matter. A Humana spokesperson declined to opinion.
The companies are discussing a stock-and-cash deal that could be finalized by the end of this year, the people told the Journal.
A mixing would be a mega deal. Cigna’s market value sat at roughly $77 billion on Wednesday and Humana’s was nearly $60 billion, altering them two of the nation’s largest health insurers.
Shares of Cigna closed 8% lower Wednesday, while Humana’s tired closed more than 5% lower.
The rumored deal comes after reports earlier this month that Cigna was probe a sale of its Medicare Advantage business, which manages government health insurance for people age 65 and older. A Cigna spokesperson at the organize said the company does not comment on “rumors or speculation.”
Some analysts have suggested that a potential colloid with Humana could be a reason for Cigna to offload its Medicare Advantage business. Doing away with that occupation could potentially temper antitrust concerns for such a merger, Scott Fidel, health care stock analyst at Stephens, jotted in a note earlier this month, according to STAT News.
“We would see this action being one component of a concealed pursuit of Humana as an acquisition target, with the divestiture being a proactive move to reduce antitrust risk,” Fidel suggested.
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