HCSG - Elevance HCSC interested in Cigna's Medicare Advantage unit

2023-12-15 12:31:50 ET

Elevance Health Inc (NYSE: ELV) and Health Care Services Corp (NASDAQ: HCSG) are reportedly interested in buying the Medicare Advantage unit of Cigna Group (NYSE: CI).

Here’s what we know so far

The said business is worth over $3.0 billion, as per a Bloomberg report on Friday.

Cigna is expected to receive final bids for its Medicare Advantage business in the coming week. But there’s no guarantee that discussions will indeed lead to a sale, as per people familiar with the matter.

Note that the insurance company was reported interested in a merger with peer Humana Inc last month. But the healthcare giants scrapped that plan this week after failing to agree on financial terms of the potential agreement as Invezz reported here .

Cigna stock is down 3.0% at writing on Friday.

Cigna expects its Medicare unit to lose money

Cigna was first reported considering a sale of its Medicare Advantage business in November. The unit has less than 600,000 enrolees and is expected to lose money not just this year but in 2024 as well.

The managed healthcare company, after abandoning the prospect of a merger with Humana, revealed plans of repurchasing another $10 billion worth of its stock. At least half of it will be executed in the first six months of 2024, as per Cigna Group.

Last month, the New York listed firm reported solid results for its third financial quarter and raised its outlook for the future.

Wall Street currently has a consensus “overweight” rating on shares of Cigna Group.

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