Walmart Is in Early Talks to Buy Health Insurer Humana: WSJ

Walmart Inc. is in early talks to acquire health insurer Humana Inc., the Wall Street Journal reported, a transaction that would pitch the retailer headlong into a rapidly changing industry whose surging costs and regulatory pressures have led to a series of megadeals.

The details of the discussions aren’t clear, and a deal may fall through, the Journal said, citing unidentified people familiar with the matter. Humana, valued at about $37 billion, would be Walmart’s largest deal on record. Walmart declined to comment to Bloomberg News, while Humana didn’t immediately respond.

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Health care spending accounted for about 18% of the U.S. economy last year, and continues to surge with an aging population, pricey medications and a complex regime of reimbursements and middlemen. Companies have been trying to address some of the market’s inefficiencies by getting bigger: Cigna Corp. is acquiring Express Scripts Holding Co. for $54 billion, and CVS Health Corp. is buying Aetna Inc. for $68 billion.

For Walmart, which operates thousands of pharmacies in its stores, the logic of buying an insurer could be similar to drugstore chain CVS’s plan — gaining more leverage in negotiations with drug companies by taking up a bigger share of purchasing power for pharmaceuticals.