After Dropping Humana Acquisition Attempt Cigna In Talks To Sell Medicare Advantage Business Amid Competition
Portfolio Pulse from Vandana Singh
Cigna Group (NYSE:CI) is in discussions to sell its Medicare Advantage business, with Health Care Service Corporation and Elevance Health Inc (NYSE:ELV) as potential buyers. The sale is expected to fetch bids over $3 billion. Cigna, which recently ended acquisition talks with Humana Inc (NYSE:HUM), has a smaller presence in the Medicare Advantage market with fewer than 600,000 enrollees. The Medicare Advantage sector is predicted to face financial losses in the current and next fiscal year. Cigna has also increased its share repurchase authorization by $10 billion, totaling $11.3 billion. Shares of ELV and CI were down on the last check Friday.
December 15, 2023 | 7:35 pm
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NEUTRAL IMPACT
Cigna is selling its Medicare Advantage business, which could fetch over $3 billion. The company has also increased its share repurchase authorization to $11.3 billion.
The sale of the Medicare Advantage business could provide a significant cash influx for Cigna, but the reported financial losses in this sector may temper investor enthusiasm. The increased share repurchase authorization could be seen as a positive move to return value to shareholders, potentially offsetting the negative impact of the sale news.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Elevance Health Inc is in the running to acquire Cigna's Medicare Advantage business, which is expected to draw bids exceeding $3 billion.
Elevance Health's potential acquisition of Cigna's Medicare Advantage business could expand its market presence, but the financial losses projected for the sector and the competitive nature of the bidding may introduce uncertainty for investors.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70
NEUTRAL IMPACT
Humana Inc's acquisition talks with Cigna Group have ended without an agreement, leading Cigna to pursue other strategic options.
The termination of talks with Cigna may have a neutral impact on Humana's stock as the market had not fully anticipated a merger. The focus now shifts to Humana's next strategic steps following the failed negotiations.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50