U.S. health insurers Humana and Cigna are in merger discussions, potentially creating a deal worth over $60 billion. This move follows years after antitrust challenges blocked similar large-scale health insurance consolidations. The proposed stock-and-cash deal, which could be finalized by year-end, aims to form a larger entity to compete with major players like UnitedHealth Group and CVS Health.
Humana, with a stronger Medicare business, and Cigna, with a large pharmacy benefit unit, have limited business overlap, mainly in Medicare plans. However, the merger faces potential antitrust scrutiny, investor concerns over valuation disparities, and the challenge of limited cost and revenue synergies. Humana is undergoing a leadership transition, and Cigna might sell its Medicare Advantage operations to ease regulatory approval. The deal’s success hinges on navigating these complexities and delivering value in a competitive and cost-sensitive healthcare market.