UPDATED: Anthem tries to acquire Cigna; UnitedHealth makes bid for Aetna
Amid speculation about consolidation among major health insurers, Anthem has reportedly made two takeover bids for Cigna in the past 10 days.
Bloomfield, Connecticut-based Cigna, which has a market value of $35 billion, has rebuffed Indianapolis-based Anthem, at a market value of $43 billion, in part because of Cigna Chief Executive David Cordani's desire to head the possible combined company, sources told the Wall Street Journal.
Both companies' stock rose amid the news Monday, with Cigna's surging more than 13 percent at presstime. If the two companies combine, they could be worth as much as $45 billion, notes USA Today.
UPDATE: The WSJ updated its article last night to report that UnitedHealth has made its first attempt to take over Aetna, citing "people familiar with the matter." UnitedHealth, headquartered in Minneapolis, is the largest insurer by revenue, with a market value of $110 billion, while Hartford, Connecticut-based Aetna is worth $42 billion.
Speculation swirled in mid-May that Aetna was poised to make an offer to either Cigna or Humana; the latter has emerged as a prime target for acquisition thanks to its large share of Medicare Advantage enrollees.
Medicare and Medicaid business is a prime growth area for larger insurers, which generally focus on employer-sponsored health plans that haven't received much of a jolt from the Affordable Care Act. However, some analysts have said Humana's share price needed to come down before it could make a deal.
Anthem's latest bid for Cigna was for $175 a share, the WSJ reported. If the two companies combine, they could be worth as much as $45 billion, notes USA Today. Anthem's Chief Financial Officer Wayne DeVeydt told investors at a global healthcare conference in May that the insurer's low interest rates and its desire to grow make now a perfect time for a deal to acquire smaller insurers, according to FierceHealthPayer.
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