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Cigna planning sale of group benefits division: Reuters
Posted on Wednesday, 21 August 2019 10:06
Cigna is exploring a disposal of its group benefits insurance unit, which offers disability, life, accidental death and dismemberment cover, in a deal that could be worth as much as USD 6.00 billion, people familiar with the matter told Reuters.
According to these sources, the US-based health insurance provider is working with an unnamed investment bank to manage an auction, that is likely to attract other companies with similar operations.
Cigna is reportedly weighing a sale of this unit as it looks to focus on healthcare after buying Express Scrips Holding for USD 67.00 billion last year, in the second-largest deal to target the sector on record, according to Zephyr, the M&A database published by Bureau van Dijk.
While the company declined to comment on rumours and speculation, a spokesman told Reuters the business continually reviews opportunities to ensure the delivery of value to customers and clients.
The group benefits division sits within Cigna’s disability and other operations segment, which generated adjusted income from operations of USD 233.00 million on revenue of USD 2.61 billion in the six months to 30th June 2019.
With roots tracing back more than 200 years, the health cover carrier became the business known today in 1982 through a merger of INA and Connecticut General and now has over 95.00 million customers, 40,000 employees and sales across 30 countries.
In the six months to 30th June 2019, Cigna generated adjusted income from operations of USD 3.14 billion on revenue of USD 76.77 billion.
Shares in the company closed down slightly to USD 161.15 yesterday, giving the business a market capitalisation of USD 60.85 billion.
Following the acquisition of Express Scrips last year, Cigna became in direct competition with industry leader CVS Health, which interestingly announced the largest deal on record in 2018 after closing a USD 77.00 billion acquisition of life insurance provider Aetna.
Zephyr shows there have been 1,344 deals targeting insurance carriers and related activities providers announced in 2019 to date.
The largest of these is some way behind the two biggest deals of last year as Singapore-based FWD Group Financial Services is buying SCB Life Assurance of Thailand for THB 92.70 billion (USD 3.01 billion).
© Zephus Ltd