KEY TAKEAWAYS
- Humana shares are tumbling Monday morning after The Cigna Group said it is not pursuing a merger with its smaller health insurance rival.
- Negotiations by Cigna to buy Human fell apart last year but Bloomberg reported last month that the two companies had held informal talks about a deal, with discussions in the early stages.
- Cigna shares are jumping in premarket trading.
Humana (HUM) shares are falling 5% in premarket trading Monday after The Cigna Group (CI) said it is not pursuing a combination with its smaller health insurance rival.
Cigna stock, meanwhile, is jumping 7%.
Cigna reportedly called off its plans to buy Humana late last year after neither side could agree on financial terms. Bloomberg reported last month that the two companies had held informal talks about a deal, with discussions in the early stages.
Cigna Says Committed To M&A if High Likelihood of Closing
“In light of recent and persistent speculation, The Cigna Group expects to communicate that the company is not pursuing a combination with Humana Inc.,” Cigna said.
“The Cigna Group remains committed to its established M&A criteria and would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close,” the Bloomfield, Conn.-based company added.
Cigna said it had bought $6 billion of stock this year, including $1 billion so far in the fourth quarter, and will continue to “actively” repurchase shares into next year. It said it would use the bulk of proceeds from the sale of its Medicare businesses to fund the buybacks.
Humana didn’t immediately return an Investopedia request for comment.
Humana shares had lost 37% of their value this year through Friday’s close, while Cigna’s had risen about 7%.
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