Cigna resumes mega merger talks with rival health insurer Humana, Bloomberg News reports

(Reuters) – U.S. health insurer Cigna (NYSE:CI) Group has revived efforts to merge with smaller rival Humana (NYSE:HUM) after abandoning the pursuit late last year, Bloomberg News reported on Friday, citing people familiar with the matter.

The companies have held informal, early discussions recently about a potential deal, the report said.

Shares of Humana, which has a market capitalization of about $32 billion, were up about 6% in after-hours trading on Friday, while those of Cigna were down about 5%. Cigna was valued at about $94 billion, according to data compiled by LSEG.

Cigna and Humana declined to comment.

Last year, Reuters reported that Cigna ended its attempt to negotiate an acquisition of Humana after the pair failed to agree on a price and announced a $10 billion worth of shares buyback.

No decision has been made and Cigna or Humana could opt to push any deal past the new year or decide against pursuing one altogether, the Bloomberg report said.

Cigna, which primarily deals with employer-sponsored healthcare plans, is in the process of selling its Medicare Advantage (MA) business that manages government-backed health insurance for people aged 65 and older.

It struck a $3.3 billion deal with insurer Health Care Service Corp earlier this year to sell its MA business.

Humana has lost nearly 40% of its value this year as it faces multiple challenges, including declining enrollments in its top-rated Medicare plans, elevated costs due to higher demand for medical care and lower-than-expected reimbursement rates from the government.

By the time the deal talks ended, sources had told Reuters that there was still a possibility of a tie-up in the future.

A fierce antitrust scrutiny was also looming at the time due to potential consolidation in the U.S. health insurance sector.