Cigna and Humana have abandoned talks to merge into a powerhouse insurer that would have had a market value nearing $140 billion, the Wall Street Journal reported Sunday.
The news organization, citing people familiar with the matter, said the two companies could not agree on price and other financial terms.
Neither Cigna nor Humana ever confirmed they were in talks about a possible combination, discussions that were reported by the Journal late last month.
Humana declined comment. Cigna did not address questions about the merger discussions.
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Cigna on Sunday announced its plans for an additional $10 billion of stock buybacks, bringing its total planned repurchases to $11.3 billion. Cigna aims to use the majority of its discretionary cash flow for share repurchase next year, including repurchasing at least $5 billion of common stock during the first half of 2024.
"As we look at the broader landscape and the strategic opportunities before us, we will remain financially disciplined with a clear focus on executing against our strategy, delivering value for our shareholders, and investing in our future," Cigna CEO David Cordani said in a news release. "In light of the current environment, we will consider bolt-on acquisitions aligned with our strategy, as well as value-enhancing divestitures."
The stock repurchases could be made “from time to time on the open market at prevailing market prices, through accelerated share repurchase agreements, in privately negotiated transactions, in block trades, and/or through other legally permissible means," Cigna said in the news release.
The Journal reported Nov. 29 that Cigna and Humana were considering a stock-and-cash transaction that could have been announced by the end of the year, citing people familiar with the matter.
Cigna continues to explore the sale of its Medicare Advantage business, according to the Journal story on Sunday. New agency Reuters reported early last month that Cigna was weighing a divestment of that line of business, which covers about 600,000 members. Cigna’s Medicare Advantage membership makes up a fraction of its 19.6 million total members, who mostly fall under its commercial business.
Since speculation of a potential Cigna-Humana transaction began circulating, industry leaders have questioned whether the megadeal could overcome antitrust scrutiny. The companies both sell health insurance, offer pharmacy services and provide direct care but there are key differences between the two.
