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US health insurer Cigna scraps $10B deal to buy Humana: report

U.S. health insurance company Cigna has ended talks to buy fellow Humana and plans to buy back $10 billion of its own shares, two people familiar with the situation said on Sunday.

The deal could cost more than $60 billion, but it was certain to come under intense antitrust scrutiny.

The Wall Street Journal earlier reported that the deal was scrapped after the two companies were unable to agree on price and other financial terms, citing people familiar with the matter.

The report said Cigna is shifting its focus to smaller, so-called bolt-on acquisitions in the near term.

Cigna continues to believe in the benefits of the combination with Humana. The new company would have focused on improving access to care and lowering costs for consumers, the report said.


In the short term, Cigna is shifting its focus to smaller, so-called bolt-on acquisitions. Reuters

The magazine added that Cigna believes the deal was achievable from a regulatory perspective despite the current administration's hard line on mergers.

But on Sunday, Cigna announced plans to buy back an additional $10 billion in stock, bringing the total buybacks to $11.3 billion.

Cigna Chairman and CEO David Cordani said in a statement: “Cigna stock is significantly undervalued, and the share buyback is designed to support high-quality care, improve affordability, and improve health outcomes. “This represents the deployment of value-enhancing capital as we work to improve our value proposition,” it said in a statement.

The companies did not immediately respond to Reuters' requests for comment on the acquisition talks.

A merger would have given the combined company a larger size to rival U.S. health insurance giants UnitedHealth Group and CVS Health.

Cigna and Humana, which have market values ​​of $77 billion and $59 billion, respectively, currently have overlapping businesses focused on Medicare plans for seniors in the United States.


The new company would have focused on improving access to health care and lowering costs for consumers.
The new company would have focused on improving access to health care and lowering costs for consumers. Reuters

Humana's Medicare business is much larger and more profitable than Cigna's.

Reuters reported in November that Cigna was considering selling its Medicare Advantage business, but its performance disappointed investors.

The sale could improve the chances that a merger with Humana will overcome antitrust challenges, regulatory lawyers said.

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