Cigna confirms it won’t pursue combination with rival Humana

Cigna Group said it won’t pursue a combination with rival insurer Humana Inc. after reports the two companies had renewed discussions of a deal.

The company “remains committed to its established M&A criteria and would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close,” according to a statement Monday.

Cigna shares jumped by 8.7% at the New York market open, while shares in Humana dropped by 6%.

Shares in Indianapolis-based insurance rival Elevance Health Inc. were up 1.4% Monday morning, to $428.67 each. Elevance, formerly known as Anthem, tried to acquire Cigna for $54 billion in 2015, but the deal was blocked by the Department of Justice in 2017 for antitrust reasons.

The two health insurance giants, with a combined market value of roughly $125 billion, held talks about a deal last year, but Bloomfield, Connecticut-based Cigna walked away after the two companies failed to agree on a price, Bloomberg News reported in December.

The discussions were revived as the U.S. government intensified its effort to control Medicare costs that have eaten away at Louisville-based Humana’s finances and market value, Bloomberg News reported.

The statement “is motivated by renewed speculation” about the deal after Donald Trump’s election win, Stephens Inc. analyst Scott Fidel wrote in a research note. The company contrasted the trouble in the Medicare Advantage market with “its attractive mix of stable businesses and significant exposure to fast growing end-markets” like specialty pharmacy, Fidel wrote.

Cigna said it was focused on buying back its own shares and that it had repurchased $6 billion of stock year to date, including $1 billion so far in the fourth quarter.

The company said it expects to “continue actively repurchasing its shares in the fourth quarter and in 2025.”

There had been concerns that a deal would face legal action from the Federal Trade Commission and the Department of Justice because it “would create a pharmacy-benefit behemoth with more than 30% share,” Bloomberg Intelligence analyst Glen Losev wrote in an October note.