AndreyPopov
Cigna (NYSE:CI) and Humana (NYSE:HUM) have reportedly scrapped plans to merge after being unable to agree on financial terms, including price.
Cigna will instead seek out bolt-on acquisitions and conduct a major stock buyback, according to The Wall Street Journal, which cited people close to the matter. The Journal first reported the companies were in merger talks late last month.
Investors failed to embrace the idea of a merger, with Cigna shares dropping 8% following news of an impending deal and trending lower since. Humana shares have also taken a significant hit.
The newspaper said Sunday that the proposed deal would have had Cigna acquiring Humana in a cash-and-stock deal with a “large” stock component. Instead, Cigna now plans to conduct an additional $10B stock repurchase, which would bring the total amount of its planned buyback to $11.3B. The company is looking at buying back at least $5B in common stock before the end of the first half of 2024.