U.S. health insurer Cigna ended its attempts to merge with competitor Humana after the two companies failed to reach an agreement, The Wall Street Journal (WSJ) reported.
The two health insurance giants spent recent weeks discussing a potential merger that would’ve produced a powerhouse company worth an estimated $140 billion by the end of the year, per WSJ.
This plan, however, was abandoned after shareholders expressed concerns with the combination and the companies failed to agree on financial terms, WSJ said, citing people familiar with the matter. The people told WSJ the deal would’ve involved Cigna acquiring Humana through a cash-and-stock transaction with a “large stock component.”
Shareholders “reacted coolly,” and Cigna stock dropped nearly 10 percent in the wake of the talks, according to WSJ.
People familiar with the talks told WSJ that Cigna still supports the benefits of a combined company, which they said would’ve worked toward improved access to care and lower consumer costs.
Cigna, based in Bloomfield, Conn., confirmed to WSJ it will now focus on smaller acquisitions and is expecting an additional $10 billion in stock buybacks to bring the company’s total planned repurchases to $11.3 billion.
Talks of a merger between the two companies began in 2015, but Humana, based in Louisville, Ky., eventually decided on a deal with health insurer Aetna. That $34 billion deal, however, was later called off in 2017 after a federal judge rejected it due to concerns over prices and benefits, The Associated Press reported.
Aetna was later acquired by CVS Health in 2018 in a nearly $70 billion deal.
A potential merger between Cigna and health insurer Anthem was also struck down by a federal judge in 2017 as part of an antitrust lawsuit.
The Hill reached out to Cigna and Humana to verify WSJ’s report.
