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(Add information about why the negotiations failed in paragraph 3)
By Anirban Sen
Dec 10 (Reuters) – U.S. health insurer Cigna has ended its bid to negotiate a buyout of peer-reviewed Humana, two sources familiar with the situation said on Sunday, as the company announced plans to buy back the $ 10 billion worth of shares.
The deal could be worth more than $60 billion but was sure to attract antitrust scrutiny.
Trade talks ended due to the parties’ inability to agree on a price, two common explanations for the situation said. There remains the possibility of a relationship in the future, those details.
The Wall Street Journal previously reported that the deal had been canceled. Cigna is turning its focus to smaller, so-called impulse purchases in the near future, the report said.
However, Cigna, on Sunday announced plans to make an additional $ 10 billion in share repurchases, bringing the total amount of repurchases to $ 11.3 billion.
“We believe Cigna’s shares are highly valued and the buyback represents an improved use of capital as we work to support high-quality care, improve efficiency, and improve health outcomes,” he said. Cigna Chairman and CEO David Cordani said in a statement.
Both companies did not immediately respond to a Reuters request for comment on the transaction.
The merger would have given the combined company more scale to rival American health insurance players UnitedHealth Group and CVS Health.
Cigna and Humana, with market values of $ 77 billion and $ 59 billion, respectively, currently have integrated businesses, focusing on Medicare plans for American adults.
Humana’s Medicare business is larger and more profitable than Cigna’s. Reuters reported in November that Cigna was exploring a sale of its Medicare Advantage operations, whose performance had disappointed investors. This emphasis could increase the chances of a merger with Humana surviving competitive challenges, regulatory lawyers say.
(Reporting by Manas Mishra and Juby Babu in Bengaluru and Anirban Sen in New York; Editing by Megan Davies, Greg Roumeliotis, Sriraj Kalluvila, Bill Berkrot and Mark Porter)