Cigna has resumed mega merger talks with rival health insurer Humana, Bloomberg News reported

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

The companies recently held informal, preliminary discussions about a possible deal, according to reports.

Shares of Humana, which has a market capitalization of about $32 billion, were up about 6% in after-hours trading Friday, while Cygna shares fell about 5%. Cigna was valued at about $94 billion, according to data compiled by LSEG.

Cigna and Humana declined to comment.

Last year, Reuters reported that Cigna had ended negotiations to acquire Humana after the pair failed to agree on a price and announced a share buyback worth $10 billion.

No decision has been made, and either Cigna or Humana could decide against pursuing a deal or pursuing one altogether before the new year, Bloomberg reports.

Cigna, which primarily deals in employer-sponsored health care plans, is in the process of selling its Medicare Advantage (MA) business that administers government-backed health insurance for people age 65 and older.

It struck a $3.3 billion deal with insurer Health Care Services Corp. earlier this year to sell its MA business.

Humana has lost nearly 40% of its value this year as it faces multiple challenges, including declining enrollment in its top-rated Medicare plan, higher costs due to higher demand for medical care and lower-than-expected reimbursement rates from the government.

While the deal talks are over, sources told Reuters that a tie-up is likely in the future.

A formidable antitrust test was also open at the time due to potential consolidation in the US health insurance sector.

(Reporting by Mariam Sunny in Bengaluru; Editing by Alan Barona)