Anthem has reportedly offered to buy competitor Cigna Corp., the latest rumored deal in a growing health insurance merger merry-go-round.
Anthem has made several offers to acquire Cigna, the latest coming at $175 per share, the Wall Street Journal reported Monday, citing unnamed sources. However, Cigna has reportedly spurned Anthem. The two health insurers have held talks for several months, the Wall Street Journal said.
The move comes weeks after Humana, another large health insurance company, began exploring a sale. Aetna and Cigna were cited as the two interested buyers for Humana.
Spokespeople for Anthem and Cigna both declined to comment on market speculation.
Cigna's stock shot up more than $16 to $153.70 after the Anthem takeover report, as of early Monday afternoon. Shares of Anthem were up more than $4, or 2.7%, to $165.02 during mid-day trading. The news dealt a small blow to Humana; its stock dropped more than $2 to $210.26.
Aetna, Anthem, Cigna and Humana are all close in terms of market capitalization, ranging from Humana's $31.2 billion to Anthem's $43.2 billion. However, each company differs in terms of products offered and revenue. Anthem, a large Medicaid and employer insurer, had more than double Cigna's revenue last year. Cigna mostly focuses on employer-sponsored health plans and has a growing international market. Humana focuses mostly on Medicare Advantage, while Aetna may be the most diversified among the four.
All four companies are smaller than UnitedHealth Group, the largest insurer by revenue that has a growing data analytics and consulting segment called Optum.
Financial analysts have predicted varying levels of merger and acquisition activity this year among the managed-care companies. Insurers have thrived under the Affordable Care Act, but some want to build up their patient bases even more to better spread risk.