(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)