Cigna abandons pursuit of Humana, plans $10 billion share buyback -sources By Reuters

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<span>© Reuters. FILE PHOTO: Signage for Humana Inc. is pictured at a health facility in Queens, New York City, U.S., November 30, 2021. REUTERS/Andrew Kelly/File Photo</span><br />
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<p>By Anirban Sen</p>
<p>(Reuters) -U.S. health insurer Cigna (NYSE:) has ended its attempt to negotiate an acquisition of peer Humana (NYSE:), two sources familiar with the situation said on Sunday, as the company announced plans to buy back $10 billion worth of shares.</p>
<p>The deal could have exceeded $60 billion in value but was certain to attract fierce antitrust scrutiny.</p>
<p>The deal talks ended due to the parties not being able to agree on price, two sources familiar with the situation said. There remains the possibility of a tie-up in the future, those sources said. </p>
<p>The Wall Street Journal earlier reported that the deal was scrapped. Cigna is turning its focus toward smaller, so-called bolt-on acquisitions in the near term, the report said.</p>
<p>Cigna, however, on Sunday announced plans to do an additional $10 billion in share repurchases, bringing total repurchases to $11.3 billion. </p>
<p>“We believe Cigna’s shares are significantly undervalued and repurchases represent a value-enhancing deployment of capital as we work to support high-quality care, improved affordability, and better health outcomes,” Cigna Chairman and Chief Executive Officer David Cordani said in a statement.</p>
<p>Both companies did not immediately respond to a Reuters request for comment on the deal talks.</p>
<p>A merger would have given the combined company more scale to rival bigger U.S. health insurance players UnitedHealth Group (NYSE:) and CVS Health (NYSE:).</p>
<p>Cigna and Humana, which have market values of $77 billion and $59 billion, respectively, currently have business overlap, concentrated in Medicare plans for older Americans.</p>
<p>Humana’s Medicare business is much bigger and more profitable than Cigna’s. Reuters reported in November that Cigna was exploring a sale of its Medicare Advantage operations, whose performance has disappointed investors. This divestment could boost the chances of a combination with Humana surviving antitrust challenges, regulatory lawyers said.</p>
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