Signage for Humana Inc. is pictured at a health facility in Queens, New York City, U.S., November 30, 2021.
A Cigna-Humana merger would create a giant in health insurance Reuters / ANDREW KELLY

Health insurance companies Cigna and Humana are in talks for a merger that could create a major player in the industry, The Wall Street Journal reported, citing people familiar with the discussions.

The cash-and-stock deal could be finished by the end of the year, according to the report.

Cigna shares fell more than 4% after the news. Humana had small changes.

The deal will give the companies scale to compete with UnitedHealth and CVS Health, the Wall Street Journal said.

Cigna has a market capitalization of about $80 billion, while Humana is valued at around $63 billion.

The combination would give Cigna access to Humana's big market share in the Medicare segment, which grows fast, according to the report. Humana would benefit from Cigna's solid position in pharmacy benefits, the Journal said.

If the deal is concluded, it could the biggest of the year, surpassing the $60 billion agreement of ExxonMobil to buy Pioneer Natural Resources, which was announced in October, the report said.

M&a deals