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Analyst: Aetna-CVS deal could prompt Humana to be acquired by Walmart

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Analyst: Aetna-CVS deal could prompt Humana to be acquired by Walmart

By Boris Ladwig
Insider Louisville

A health care industry analyst said that Aetna's pending merger with CVS might prompt retail giant Walmart to acquire Humana for somewhere near $300 per share.

Ana Gupte, of Leerink Partners, told Squawk Box Friday that Aetna wanted to acquire CVS in part to start opening community health centers in CVS locations to boost the number of its insurance customers.

Such a union is "potentially transformative," she said, and could prompt other players to look for similar merger partners, with Walmart a possible acquirer of Humana.

"Humana and Walmart have been in a very tight relationship for like six or seven years ... They steer Humana members to Walmart."

Speculation about Humana preparing for a merger has run high since the Louisville-based insurer started cutting staff in November. Gupte said the cuts, coupled with the sale of a long-term care insurance business and a "change of control" filing, which would reward its executives with millions of dollars in the case of a merger, point to an increasing potential for a merger.

The merger speculation comes on the heels of two failed mergers among insurance giants. Judges this year blocked proposed mergers between Aetna and Humana, and Cigna and Anthem, over antitrust concerns.

Health care experts had told Insider that regardless of the failures of those deals, pressures toward consolidation in the health care industry would remain: Insurance company executives believe that their companies need to get bigger to have greater bargaining power to negotiate good deals with health care providers, such as hospital systems, which also have gotten bigger to counter the heft of the insurers.

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