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

By Sriparna Roy and Mariam Sunny

(Reuters) -Cigna Group said on Monday (NASDAQ:MNDY ) it is not pursuing a combination with rival health insurer Humana (NYSE:HUM ), days after Donald Trump's reelection as U.S. president raised investor hopes that any merger would face far less antitrust scrutiny.

Humana shares rose after Tuesday's election as investors bet on an easier antitrust review for any mega-merger during a Trump administration, analysts said.

On Monday, Humana shares fell 4% to $276.44 in early trading, while Cigna (NYSE:CI ) was up more than 7% at $343.53.

"Cigna's latest clarification certainly puts the possibility of such a deal to bed," Oppenheimer analyst Michael Wiederhorn said in a research note. Humana's stock will remain under pressure following the news, he added.

The company in its release said it remains focused on acquisitions that are "strategically aligned, financially attractive and have a high probability to close."

Humana did not immediately respond to a Reuters request for comment.

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 also said it expects to actively repurchase shares in the fourth quarter and in 2025. The company said it was making the announcement ahead of meetings with investors and analysts over the next several weeks.

Morningstar analyst Julie Utterback called Cigna's announcement 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, which manages employer-sponsored healthcare plans and runs a pharmacy benefit manager, is in the process of selling its Medicare Advantage business, which manages government-backed health insurance for people aged 65 and older.

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

Source: Investing.com