Bloomberg: Aetna Nears Deal To Acquire Humana In $34 Bln Cash, Stock Deal

(RTTNews) - Health insurer Aetna, Inc. (AET) is nearing a $34 billion cash and stock deal to buy smaller peer Humana, Inc. (HUM), according to a Bloomberg report late Thursday. Humana is the second-largest provider of private Medicare insurance, with 3.2 million Medicare Advantage members.

The companies are expected to announce a deal as early as this weekend after two weeks of intense negotiations.

The deal could imply a value of $230 per share, which would represent a 22.7 percent premium over Humana's closing stock price of $187.50 on Thursday.

If a deal is struck, it could be billed as the largest deal in the insurance industry since Anthem, Inc (ANTM) bought WellPoint in 2004 for $16.6 billion.

Talks between the two companies have gained momentum, spurred by recent merger negotiations between Anthem and Cigna Corp (CI). However, Cigna rejected a $47 billion takeover bid from Anthem last month, saying the offer wasn't in the best interests of shareholders and Anthem executives weren't fit to lead a merged insurance giant.

Humana also had received an acquisition offer from Cigna, although Humana preferred a deal with Aetna. Meanwhile, UnitedHealth Group, Inc (UNH) also made a takeover approach for Aetna.

The health insurance industry is seeing a consolidation, with all five of the largest insurers in talks over acquisitions. Some have already agreed to deals, like Centene Corp. (CNC) agreeing on Thursday to acquire managed health care company Health Net, Inc. (HNT) in a cash and stock deal valued at about $6.8 billion, including assumed debt of about $500 million.

Merger talks in the industry have picked up as companies seek to better benefit from the Affordable Care Act, and to cut costs.

The health insurance industry got a boost last week when the Supreme Court upheld a part of the Obama adminstration's Affordable Care Act, which has significantly increased the number of Americans covered by health insurance.