Cigna, Humana Reportedly in Mega-Merger Talks

Healthcare insurance titans Cigna and Humana are reportedly in merger talks involving stock and cash that could come together by the end of the year, according to the Wall Street Journal.

Cigna, which had over $181 billion in revenue last year, might combine its commercial insurance operation with Humana’s concentration on Medicare. Cigna was valued at roughly $83 billion before the news surfaced on Wednesday, according to the WSJ, while Humana was valued at around $62 billion.

Humana is now the second largest Medicare Advantage insurer, after only UnitedHealthcare. Last year, the company earned $93 billion in revenue. Humana also has primary-care clinics, which may supplement Cigna’s Evernorth Health Services division.

The merger would establish one of the largest healthcare firms in the United States, competing with UnitedHealth Group, Elevance Health, and CVS.

The WSJ story comes after Reuters recently reported that Cigna was considering selling its Medicare Advantage operation, which may help the merger avoid antitrust hurdles.

The potential mega-merger would be a positive indication for the M&A markets, as rising interest rates have been stifling deal activity this year. It would likely be the year’s largest transaction, surpassing Exxon Mobil’s $60 billion agreement to acquire Pioneer Natural Resources last month.

The WSJ report comes after Reuters recently reported that Cigna was exploring a potential sale of its Medicare Advantage business, a move that might help fend off antitrust roadblocks to the merger.