Cigna pulls plug on pursuit of Humana

The news: Cigna Group has abandoned its plans to acquire Humana to create a global health-insurance giant in what would have been one of the largest mergers in recent years, opting instead to significantly increase stock buybacks.

The numbers: The deal would have valued the two companies at an approximate combined USD140 billion ($213.30 billion), however Cigna walked away from discussions after failing to agree with Humana on a price. In early US trading Monday, Cigna stock had jumped 17% on news of the failed merger.

The context: Instead of the merger, Cigna announced its intention to increase its existing share buyback program by an additional USD10 billion, bringing the company's total share repurchase to USD11.3 billion. Cigna’s announcement on the buybacks made no mention of the failed negotiations with Humana.

What they said: "As we look at the broader landscape and the strategic opportunities before us, we will remain financially disciplined with a clear focus on executing against our strategy, delivering value for our shareholders, and investing in our future. In light of the current environment, we will consider bolt-on acquisitions aligned with our strategy, as well as value-enhancing divestitures,” said David M. Cordani, chairman and CEO of The Cigna Group.