Mergers and acquisitions happen in all sectors and the process is the same for every merger. A company continually looks at strategy and sometimes it is determined a company would add to the existing company. The company has assets, delivery services that would make a great fit for the existing one. Then the hard begins of determining the best price which the other company will agree on and the merger can go forward. If the price is too low, the answer is no, and every company believes it is worth more, or the price is both an art and science. Sometimes it does not work.

In an article by Anirban Sen of Reuters, US health insurer Cigna Group called off its attempt to buy a rival company Humana after the pair agreed to the correct price.

If Cigna-Humana combination had gone through the 2 companies would have a value of $140 billion. It was expected the antitrust scrutiny would have been an obstacle to come. Cigna and Humana have business overlap concentrated in Medicare plans for older Americans.

Cigna Group announced plans to buy back $10 billion worth of shares for President and CEO David Cordani believes the shares are undervalued. This year the company has bought back $1.3 billion in shares.

Linking to dividend paying stocks, companies that are profitable have an active strategy group because they have the abilities to pay the bills – there is movie line in crime drama which says follow the money. The mergers go through a process and when the process reaches the press release stage, there is no plan B. The game plan is plan A. When things do not work out, as an investor you need to ask how does the company react? The merger process takes many hours of work and executive time, how does the company go forward?

There are more questions than answers, till the next time – to raising questions.