Cigna shares slide after report it could merge with Humana

Shares of Cigna slid on Wednesday after a report that the company is in talks with Humana about a merger between the two health care giants.

Spokespeople for Cigna and Humana did not immediately respond to requests for comment on the report from the Wall Street Journal, which cited people familiar with the matter.

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 merger would be a mega deal. Cigna’s market value sat at roughly $80 billion on Wednesday and Humana’s was around $63 billion, making them two of the nation’s largest health insurers.

Shares of Cigna fell more than 5% on Wednesday, while Humana’s stock was relatively flat.  

The rumored deal comes after reports earlier this month that Cigna was exploring a sale of its Medicare Advantage business, which manages government health insurance for people aged 65 and older. A Cigna spokesperson at the time said the company does not comment on “rumors or speculation.” 

Some analysts have suggested that a potential combination with Humana could be a reason for Cigna to offload its Medicare Advantage business. Doing away with that business could potentially temper antitrust concerns for such a merger, Scott Fidel, health care stock analyst at Stephens, wrote in a note earlier this month, according to STAT News. 

“We would see this action being one component of a potential pursuit of Humana as an acquisition target, with the divestiture being a proactive move to reduce antitrust risk,” Fidel said.