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| Photo illustration by Modern Healthcare |
The Cigna Group has pulled the plug on its planned merger with Louisville-based Humana Inc., which would have created a huge health-insurance company.
"The companies couldn’t come to agreement on price and other financial terms, according to people familiar with the matter," reports Lauren Thomas of The Wall Street Journal. "Cigna would have been acquiring Humana in a cash-and-stock transaction with a large stock component, the people said. Shareholders reacted coolly, with Cigna stock dropping nearly 10% since the talks surfaced as questions swirled about the wisdom of using the company’s stock as currency, among other concerns."
Thomas's sources told her that Cigna still believes in a merger with Humana, creating a company that would focus on improving access to care and lowering costs for consumers. Humana announced in February that it planned to concentrate on Medicare Advantage plans and sell its purely commercial lines of insurance, while expanding home-health and primary-care businesses, which it says support Advantage customers.
Humana has been the object of suitiors for years and "is in the midst of a succession handoff—often an opportune time for would-be acquirers to pounce," Thomas writes. "Humana said in October that Jim Rechtin—previously chief executive of Envision Healthcare—would take over as president and chief operating officer, effective Jan. 8. Rechtin was then to take over as CEO from Bruce Broussard in the back half of 2024."
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