Shares of Cigna Group (CI) declined by 1.6% in morning trading following the announcement that the health insurer is in advanced negotiations to sell its Medicare business. According to sources familiar with the matter, the potential buyer is Health Care Service Corp., with the sale estimated to be valued between $3 billion and $4 billion.
A Departure from Cigna's Strategy
If the deal goes through, it would represent a significant shift in Cigna's business strategy as they have been actively expanding in the Medicare market. On the other hand, this acquisition would lead to a major expansion for HCSC, whose parent company is Blue Cross Blue Shield.
No Official Statement from Cigna
Cigna has not yet responded to requests for comment regarding these negotiations. However, investors have shown their concern as Cigna's stock has seen a 5% decline over the past year.
Comparison with Sector Performance
Over the same period, the Health Care Select Sector SPDR ETF (XLV) has experienced a modest gain of 2.4%, while the broader S&P 500 (SPX) has advanced by an impressive 23.3%.
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