Published on December 10, 2023 at 8:10 p.m.Updated December 10, 2023 at 8:11 p.m.
While rumors persisted for ten days, the Cigna and Humana groups will ultimately not merge. These two American health insurance giants, little known in Europe, have not been able to agree on the price and other financial conditions, reports the “Wall Street Journal”, which cites sources close to the matter.
In the short term, Cigna is focusing on smaller acquisitions. The group nevertheless plans “a significant increase in its share buyback program”, specifies a press release, for an amount of $10 billion, which will bring the total planned buybacks to $11.3 billion.
“We believe Cigna shares are significantly undervalued and that the buybacks represent a value-enhancing deployment of capital as we work to support high-quality care, increased accessibility and better health outcomes. health,” David Cordani, president and CEO of Cigna, said in the release.
A heavyweight in health insurance
With $181 billion in turnover in 2022, Cigna, valued at $77 billion on the stock market, is one of the heavyweights in American health insurance. With its Express Scripts activity, the group is also present in the market for “ benefit managers” (PBM), intermediaries who negotiate with pharmaceutical laboratories on behalf of companies and administrations, in order to purchase medicines at a lower cost.
For its part, Humana (valued at 59 billion), with its 93 billion turnover in 2022, is the second largest Medicare insurer, named after the subsidized federal health insurance program for seniors – an activity that Cigna does not have. failed to develop as successfully. It’s much bigger and more profitable than Cigna. According to Reuters, Cigna was considering selling its Medicare Advantage business, whose performance had disappointed investors.
30 million policyholders
By merging, the two groups would have brought themselves closer to the weight of the two giants of the sector, CVS and UnitedHealth – the latter recorded $324 billion in turnover in 2022. UnitedHealth manages the health of 47 million policyholders, compared to around 30 million for Cigna and Humana combined.
Despite everything, Cigna continues to believe in the merits of a merger with Humana. The new company would have focused on improving access to care and reducing costs for consumers, reports the “Wall Street Journal”.
This merger, which would have alerted the American antitrust, could have been possible from a regulatory point of view, believes Cigna, despite the severe position of the American administration on mergers and acquisitions, report the sources cited by the newspaper.