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Walmart health insurance acquisition talks underway with Humana

Walmart Health Insurance - Insurance Company Acquisition - Business

The largest retail chain in the world is reportedly in early-stage negotiations with the insurer.

A new Walmart health insurance company may one day form if its acquisition of Humana is successful. The Wall Street Journal reported that the retailer was in talks with the insurer for precisely that purpose. Reuters soon after reported that the companies were working on a possible partnership without ruling out an acquisition.

Humana’s shares skyrocketed by up to 13 percent during the trade hours following the reports.

The Walmart health insurance talks also gave the retailer’s stock prices an upward edge. The media reports stated that no specific details regarding the potential deal had been revealed. Moreover, it isn’t entirely certain that a partnership or acquisition would actually result from the talks.

CNBC quoted a Walmart statement that merely underscored that the reports have been rumors so far. Moreover, it pointed out that the company has a policy not to comment on rumors and speculation. Similarly, Humana did not provide the media outlet with an immediate response to a request for a comment from their side.

The potential Walmart health insurance deal has played a positive role in share prices since last week.

By the close of last week, the Humana insurance company’s market value was around $37 billion, said FactSet data. Over the last year, the national health insurer’s sales have risen by 30 percent. Equally, Walmart’s own shares have grown by over 25 percent.

These insurance company acquisition reports have arrived at a controversial time for health care. The American health care system is pressuring insurers to do what they can to reduce the cost of medical care in the country.

This has led to a number of attempted, successful and successful mergers and acquisitions in health care. In December 2017, CVS Health announced its intentions to purchase the Aetna insurance company for $69 billion. The outcome would bring the CVS pharmacies and pharmacy benefit manager platform together with Aetna’s insurance business.

Even Amazon, Berkshire Hathaway and J.P. Morgan have announced their intentions to work together to overcome the rising cost of covering employees with health plans. The new possible Walmart health insurance deal would be only the latest in a growing trend headed in that direction.

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