Healthcare Giants Cigna and Humana in Talks for Megamerger

Reported Megamerger Between Cigna and Humana

According to sources familiar with the matter, Cigna and Humana are in discussions for a potential stock-and-cash merger, as reported by the Wall Street Journal on Wednesday afternoon. The two healthcare companies are aiming to finalize the deal by the end of this year.

Market Response and Potential Impact

Following the news of the potential merger, both Cigna and Humana witnessed a decline in their stock prices during mid-day trading. Cigna’s shares were down 5.9%, while Humana’s shares dropped by 1.5%. If the merger goes through, the combined entity would pose a significant challenge to industry giants such as UnitedHealth Group and CVS Health in terms of market size.

Financial Figures and Previous Merger Attempts

Cigna reported revenue of approximately $181 billion last year, while Humana’s revenue stood at $93 billion. It is worth noting that in 2015, Cigna and Humana had explored the possibility of a merger, but Humana eventually opted for a deal with Aetna. However, this move faced antitrust issues and was ultimately blocked by a judge. Subsequently, Aetna was acquired by CVS in 2018. Another attempt to merge Cigna with Anthem, now known as Elevance Health Inc, also faced an unfavorable antitrust ruling, leading to the collapse of the deal.

Antitrust Considerations and Potential Divestment

To address antitrust concerns, Cigna is contemplating the sale of its current Medicare Advantage division, a move that could generate significant revenue through divestment.

If Cigna and Humana successfully merge, it could mark a pivotal moment in the healthcare industry, reshaping the competitive landscape and potentially influencing the delivery of healthcare services to millions of individuals.