Cigna resumes merger discussions with Humana, Bloomberg News reports By Reuters

(Reuters) – U.S. health insurer Cigna (NYSE:) Group has revived efforts to merge with smaller rival Humana (NYSE:) after abandoning the pursuit late last year, Bloomberg News reported on Friday, citing people familiar with the matter.

The companies have held informal, early discussions recently about a potential deal, the report said.

Shares of Humana were up about 5% in after-hours trading on Friday, while those of Cigna were down about 4%.

Last year, Reuters reported that Cigna ended its attempt to negotiate an acquisition of Humana after the pair failed to agree on a price and announced a $10 billion worth of shares buyback.

By the time the deal talks ended, sources had told Reuters that there was still a possibility of a tie-up in the future.

Cigna struck a $3.3 billion deal with insurer Health Care Service Corp earlier this year to sell its Medicare business that manages government-backed health insurance for people aged 65 and older.

Should a merger between Cigna and Humana occur, it could create a company with a value nearing $130 billion, based on their market values.

Humana has lost nearly 40% of its value this year as it has been struggling with declining enrollments in its top-rated Medicare insurance plans and elevated costs due to higher demand for medical care.

Cigna and Humana declined to comment.

(This story has been refiled to fix a typo in paragraph 7)