An industry shake-up is apparently in the works as insurance giant Aetna is targeting a major health insurer as an acquisition prospect. Wall Street sources say the most likely candidate is Humana, which dominates the Medicare field—an area where Aetna isn't strong.
Humana shares soared on the news, but so did Cigna's, suggesting Aetna has its eye on that provider, as well.
The tipoff something major was in the works came May 11 at a meeting at Aetna's headquarters, reported Healthcare Dive.
Leerink Partners hosted an investor meeting then at Aetna's headquarters during which Leerink's [analyst] Ana Gupte said consolidation seemed likely,” the online news source said. “Gupte reported that Aetna CEO Mark Bertolini's asserted that '…government business is the focus for inorganic growth, while compatible cultures for post-merger synergies were viewed as the driver in all transactions, with cheap debt making either Aetna-Humana and Aetna-Cigna meaningfully accretive possibilities and imminent.'”
In other words, Aetna's concentration in employer-sponsored plans doesn't offer the same growth potential that Medicare insurers believe awaits them. That's why analysts say a strategic acquisition is likely.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
