Cigna says it is not pursuing deal with rival Humana, shares jump

By Sriparna Roy and Mariam Sunny

(Reuters) - Cigna (NYSE:CI ) Group is not pursuing a combination with rival Humana (NYSE:HUM ), the health insurer said on Monday (NASDAQ:MNDY ), days after Donald Trump's re-election as U.S. president raised investor hopes that the reported merger may pass antitrust scrutiny.

Shares of Humana have gained nearly 13% and Cigna rose more than 2% since last week on increasing bets over an easier antitrust review for the mega-merger.

Cigna's stock rose nearly 8% in premarket trading, after the company said it "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".

Humana, whose shares fell more than 5% before the bell, did not immediately respond to a Reuters request for comment.

Morningstar analyst Julie Utterback called Cigna's announcement as "unusual" and said the move was aimed at removing pressure on its stock.

"With the Republican win last week, there was speculation by investors that the antitrust concerns may decline enough to make the deal possible," Utterback said.

Cigna said it was making the announcement ahead of meetings with investors and analysts over the next several weeks.

Bloomberg News reported in October that Cigna had revived efforts to merge with Humana. That came after Reuters reported last year that Cigna had ended its attempt to negotiate an acquisition after the pair failed to agree on a price.

Cigna, mainly dealing with employer-sponsored healthcare plans, is in the process of selling its Medicare Advantage business, which manages government-backed health insurance for people aged 65 and older.

Medicare-focused insurers such as Humana have been under pressure due to high medical costs in providing the plans as older adults seek healthcare services.

Last month, Cigna CEO David Cordani described the Medicare Advantage market as highly disrupted and said the company was focused on share buybacks.



The company said on Monday it expects to actively repurchase shares in the fourth quarter and in 2025.

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Source: Investing.com