Anthem, Cigna Rekindle Merger Talks -- Update

By Dana Mattioli 

Health insurers Anthem Inc. and Cigna Corp. are in talks to combine after Cigna last month spurned a $47.5 billion takeover from Anthem, according to a person familiar with the matter.

Representatives of the companies met Friday and Tuesday to discuss a potential tie-up, the person said. A deal could be reached in coming weeks, the person said, though there is no guarantee the latest round of talks will result in a tie-up.

Even as Cigna talks with Anthem, it remains involved in the continuing sales process for Humana Inc. as a suitor, people familiar with the matter said. In that potential tie-up, it is vying with Aetna Inc., which has made a takeover proposal for Humana.

Cigna publicly rejected the previous Anthem offer, calling it "inadequate and not in the best interests of Cigna's shareholders."

Shares of Cigna, which is based in Bloomfield, Conn., closed Wednesday at $162 each. The company's market capitalization is around $42.6 billion. That is just below Anthem's market value of $43.6 billion.

The talks come amid a flurry of discussions among the top five health insurers aimed at striking deals that will enable them to be more competitive in a health-care landscape dramatically altered by the Affordable Care Act and other developments.

Anthem has been trying to combine with Cigna for nearly a year, but the two companies have struggled to agree on price and other terms, including who would run the combined company.

The effort came to a head on a June Saturday when Anthem disclosed a series of bids that month, including most recently at $184 a share. Anthem made the offers public to appeal to Cigna shareholders in the hopes they would force the company to do a deal.

Write to Dana Mattioli at [e-mail]

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