Cigna slips and Humana gains on report of renewed merger talks

Investing.com -- Shares in Cigna (NYSE:CI) fell in premarket US trading on Monday on a report the US insurer was moving to reignite efforts to merge with smaller peer Humana (NYSE:HUM) after it ditched the pursuit last year.

The companies have held informal and early-stage discussions over a possible deal, Bloomberg News reported on Friday, citing people familiar with the matter. No decision has been reached and either Cigna or Humana could choose to push the deal into the new year or scrap it entirely, Bloomberg said.

Shares in Humana edged higher prior to the opening bell on Wall Street on Monday following gains posted in extended hours trading on Friday. Humana is currently valued at around $32 billion, while Cigna has a market capitalization of around $94 billion, according to LSEG data cited by Reuters.

Both businesses declined to comment, Reuters said.

Last December, Cigna abandoned its attempt to negotiate an acquisition of Humana after the two were unable to agree on a price, Reuters reported.

Primarily focused on employer-sponsored healthcare plans, Cigna is in the midst of offloading its Medicare Advantage unit, which oversees government-backed plans for people aged 65 and older. It has previously agreed to sell the division to insurance firm Health Care Service Corp. for $3.3 billion.

Humana, meanwhile, has been wrestling with slipping membership in its high-performing Medicare Advantage plans. The group also said in July that demand for medical care was higher than projected in the second quarter, stoking investors' fears that a recent spike in medical costs for health insurers may not soon abate.

Medical costs have been jumping industry-wide since late 2023, when older adults began to catch up on health procedures delayed by the COVID-19 pandemic. Payments from the government for managing healthcare for Medicare members have been sluggish as well.

(Reuters contributed reporting.)