Report: Humana merger with Cigna called off
Plans for Louisville-based healthcare company Humana to merge with Cigna have broken down, according to a report from the Wall Street Journal.
Shareholders from Cigna reportedly "reacted coolly" during negotiations because the Connecticut-based company's stock fell by around 10% after the Wall Street Journal first reported the merger talks Nov. 29.
If Humana and Cigna had combined, the new company could have been valued at roughly $135 billion, according to the Wall Street Journal. Cigna is an industry leader in commercial health insurance and a merger with Humana could have made the new company a key player in the Medicare business as well.
Cigna is instead focusing on "smaller" acquisitions, according to the Wall Street Journal, which stated it talked to people familiar with the talks between the two companies.
"As we look at the broader landscape and the strategic opportunities before us, we will remain financially disciplined with a clear focus on executing against our strategy,” Cigna Chief Executive David Cordani said in a statement to the Wall Street Journal.
The Courier Journal has reached out to Cigna for comment. Humana has declined to comment.
This is not the first time Humana has reportedly engaged in merger talks with other healthcare companies. In 2017, Humana had agreed to merge with health insurer Aetna, but the $37 billion deal broke down after a judge ruled the arrangement would stifle competition in the healthcare industry, The Courier Journal previously reported.
What has happened at Humana in 2023?
In February, Humana announced it was set to start phasing out commercial insurance offerings over the next two years to focus on its Medicare Advantage and other Medicare offerings and government-funded programs.
Commercial plans accounted for 4% of Humana's total premiums and services revenue in 2022, according to Securities and Exchange Commission filings, at about $3.7 billion, The Courier Journal previously reported.
David Jones, Jr., son of the famed founder of Humana, stepped down from the company's Board of Directors in March.
In the spring, Humana, one of Louisville's largest employers, opened three new CenterWell Senior Primary Care facilities in south and west Louisville. These facilities provide "value-based care" to seniors and emphasize measuring health outcomes in patients. Unlike fee-for-service care, the goal of CenterWell's model is lower healthcare costs for underserved groups, provide greater patient satisfaction and lower disease risk and health complications.
And then in October, Humana announced CEO Bruce Broussard will step down in the latter half of 2024 as part of a "multi-year succession plan" and be replaced by Jim Rechtin, a Kentucky native and former president and CEO of Envision Healthcare.
This article originally appeared on Louisville Courier Journal: Talks between Louisville-based Humana, Cigna break down
