Anthem, Cigna in new round of talks, source saysPosted On: Jul. 2, 2015 12:00 AM CST
(Reuters) — Health insurer Cigna Corp. has had its first meetings with competitor Anthem Inc. after it rebuffed Anthem's $47 billion merger proposal last month, a person familiar with the matter said on Thursday.
It was not immediately clear if the new talks, which were held in the last few days, would lead to the companies reaching a deal. The talks come as both Cigna and rival Aetna Inc. consider the possible acquisition of smaller player Humana Inc., people familiar with the matter have said previously.
The source on the Cigna-Anthem talks asked not to be identified because the discussions are confidential. Cigna and Anthem declined to comment. CNBC first reported on the latest talks between the two companies.
A combined Cigna and Anthem would have 53 million customers in commercial, government, consumer and other kinds of health insurance plans.
Big U.S. health insurers are seeking acquisitions to boost membership in government-paid health care plans and employer-based insurance. The bigger the insurer, the more power it has negotiating prices and improving its doctor networks.
Earlier on Thursday, U.S. health insurer Centene Corp. said it would buy smaller rival Health Net Inc. for $6.3 billion, underscoring the health care industry's rush to bulk up to negotiate more advantageous prices with suppliers and hospitals, and attract new customers.
In rejecting Anthem's offer, Cigna previously cited Anthem's "lack of growth strategies," complications related to its membership of Blue Cross Blue Shield Association and a "massive" data breach it suffered in February.
Cigna's board is also concerned by Anthem's "insistence" that one person — Joseph Swedish, Anthem's president and CEO — assume four roles of the combined company: chairman, CEO, president and head of integration.
Anthem has said it believes investors support its refusal to guarantee that the CEO role of the combined company would go to Cigna CEO David Cordani.