According to a news report that appeared in the Indianapolis Star online on June 4 and in the print edition of the newspaper on June 5, the Indianapolis-based Anthem is strongly considering acquiring the Louisville-based Humana. That deal would be one of the largest in U.S. health insurance history, given that Humana’s market value, based on its stock price of $213 a share as of June 4, is about $32 billion.
As the Star article reported, “Humana has not confirmed it is for sale, but it has missed Wall Street earnings estimates for several quarters. The company is working with advisers at Goldman Sachs Group on a possible sale, The Wall Street Journal reported on May 29.” The Star report added that, “In the following days, The New York Times and several financial wire services have reported that Humana is exploring a possible sale.”
The article added that “Humana, which specializes in selling Medicare Advantage policies, is under pressure. The government has reduced payments by 4 percent on those policies this year. Still, its overall Medicare business is growing by double-digits, and revenues climbed last year by 17 percent, to $48.5 billion. Anthem is a relatively small player in Medicare Advantage but has said it wants to grow there.” And it reported that “Analysts at Morgan Stanley and Deutsche Bank have mentioned Anthem as a possible buyer, along with other large insurers.”
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