(Reuters) – U.S. health insurer Cigna Group has revived merger efforts with smaller rival Humana after it abandoned the pursuit late last year, Bloomberg News reported on Friday, citing people familiar with the matter.
The two companies recently held early, informal discussions about a potential deal, the report said.
Shares of Humana, which has a market cap of about $32 billion, were up about 6% in after-hours trading on Friday, while Cigna shares 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 a takeover of Humana after the pair failed to agree on a price and announced a $10 billion stock buyback.
No decision has been made yet, and it’s possible that Cigna or Humana could choose to push any deal beyond the new year or decide not to pursue the deal altogether, the Bloomberg report said.
Cigna, which deals primarily with employer-sponsored health plans, is selling its Medicare Advantage (MA) business, which manages government-backed health insurance for people 65 and older.
It closed a $3.3 billion deal with insurance company 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 lower enrollment rates in top-rated Medicare plans, higher costs due to higher demand for Medicare and lower-than-expected reimbursement rates from the government.
By the time the deal talks ended, sources told Reuters that there was still the possibility of an alliance in the future.
There was also fierce antitrust scrutiny looming at the time due to potential mergers in the US health insurance sector.
(Reporting by Maryam Sunny in Bengaluru; Editing by Alan Barona)