Humana (NYSE:HUM) and its US health insurance peer Cigna (NYSE:CI) are discussing a deal to merge, Reuters reported on Friday, citing people familiar with the matter.
The agreement, which could exceed $60 billion in value, would likely create intense antitrust scrutiny, the media outlet reported.
In 2017, Cigna (NYSE:CI) abandoned a $48 billion agreement to acquire Anthem, now known as Elevance Health, after US courts upheld antitrust challenges.
A Cigna and Humana (NYSE:HUM) merger would be a stock-and-cash deal that could be finalized by the end of the year, according to the Wall Street Journal, which first reported on the potential agreement.
Cigna and Humana currently have limited business overlap, concentrated in Medicare plans for older Americans.
Humana's Medicare business is much bigger and more profitable than Cigna's, which means if Cigna were to divest its Medicare Advantage operations then it would increase the odds of the merger being allowed to proceed.
Shares of Humana moved up 3% to $498.50 in late morning trading on Friday, while Cigna shares also gained nearly 3% to $269.92.
Contact Sean at sean@proactiveinvestors.com