We are living in strange times indeed when almost any healthcare deal is not beyond the realm of possibility. Following in the footsteps of CVS Health and its planned acquisition of Aetna, retail giant Walmart is demonstrating just how grand its healthcare ambitions are. It is in early stage talks with Humana to acquire the health insurance business, according to The Wall Street Journal, which cited people familiar with the discussions.
In what seems like a really long time ago, Aetna once aspired to acquire Humana until that deal was scuppered last year on antitrust grounds by U.S. District Court Judge John Bates in Washington, D.C. He ruled that the deal would “substantially” reduce competition in the Medicare Advantage market. Since then, speculation has waxed and waned about who else would step up to make Humana an offer.
An SEC filing last November only added to the chatter that some form of M&A deal for Humana was in the works. At that time, Leerink Partners analyst Ana Gupte thought the most likely company to acquire Humana was Cigna, according to Fierce Healthcare citing a report by Gupte. Only four months later that observation feels a bit quaint.
Humana carries an estimated market value of $37 billion and would pose a huge challenge to integrate into a retailer’s business, albeit a retail giant. But the upside for retailers, a built-in market for their pharmacy businesses, may mean that certain companies will continue to be drawn to payers like sailors to the Sirens’ cry. Even with the CVS Health-Aetna deal, it’s too soon to tell whether these ambitious deals will be sanctioned by regulators or blocked by them.
