Cigna Halts Humana Acquisition Talks Over Valuation Disagreement, Eyes $10B Buyback and Medicare Advantage Sale

Cigna Halts Humana Acquisition Talks Over Valuation Disagreement, Eyes $10B Buyback and Medicare Advantage Sale

U.S. health insurance giant Cigna (NYSE:CI) has halted negotiations for an acquisition of rival Humana (NYSE:HUM) due to a failure to find common ground on price, according to sources familiar with the matter. The attempted merger, which could have led to a company surpassing a $140 billion valuation, faced anticipated intense antitrust scrutiny given their market positions. This move follows discussions emerging six years post-regulatory blocks on significant consolidations within the U.S. health insurance landscape.

The cessation of talks primarily resulted from the inability to reach an agreement on valuation, as noted by sources close to the situation. Despite this pause, there’s potential for future collaboration, as indicated by these sources.

Simultaneously, Cigna revealed plans for an additional $10 billion in share repurchases, effectively elevating the total repurchases to $11.3 billion. Alongside these financial moves, Cigna is contemplating the potential sale of its Medicare Advantage business, responsible for managing government health insurance catering to individuals aged 65 and older. If executed, this shift would signify a strategic reversal from its prior expansions in this sector.

While Humana chose not to provide comments, Cigna remained unresponsive to Reuters’ request for commentary regarding the aforementioned deal talks initially reported by the Wall Street Journal.

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