Cigna Group, a global health company, declared on Wednesday its final agreement to sell its Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D, and CareAllies businesses to Health Care Service Corp. The deal amounts to around $3.7 billion.
Additionally, Cigna confirmed its fiscal forecast for 2024, sticking to its target of a long-term adjusted earnings growth per share between 10% and 13%.
The sale of the Medicare Businesses and CareAllies is predicted to increase Cigna's adjusted earnings per share by 2025.
The transaction is projected to conclude in the first quarter of 2025, given the receipt of applicable regulatory clearances and the fulfillment of other standard closing conditions. It should be noted there is no financing condition.
Cigna and HCSC have also consented to a four-year services agreement. Under this agreement, Cigna subsidiary Evernorth Health Services will continue supplying pharmacy benefit services to the Medicare businesses once the transaction closes.
Upon completion of the sale, Cigna plans to utilize the proceeds strategically in line with its capital deployment priorities, primarily allocating the majority to share repurchases.
David Cordani, Cigna’s Chairman and Chief Executive Officer emphasized, "The transaction effectively positions our Medicare businesses and CareAllies for further growth as they continue addressing their customers' needs within HCSC. This decision aligns with our discerning approach to managing our portfolio and distributing resources towards growth opportunities within our Evernorth Health Services and Cigna Healthcare portfolios."
Maintaining its forecast for fiscal 2024, the company anticipates an adjusted income from operations on a per share basis of at least $28. The targeted long-term annual growth of adjusted earnings per share remains between 10 to 13 percent.
The company expects to provide an updated guidance alongside its fourth-quarter earnings release on February 2.
