Walmart's Merger for Humana-ty 👪
Buy it up, up, up
Rumors are swirling that Walmart wants to partner with or buy up Humana, a health insurance company. Walmart isn’t the only one branching out into health care and insurance. CVS is merging with Aetna, Target is interested in Kroger(including Kroger pharmacy), and Albertsons is acquiring Rite Aid.
Why all the merging?
Retail and health care/insurance mergers have heated up since Amazon partnered up with Berkshire Hathaway and JPMorgan to figure out how to cut their employee healthcare costs. Retailers are also on the prowl due to Amazon’s acquisition of Whole Foods. Many view these new mergers as a response to Amazon.
Those for the merger call this a “strategic” move on Walmart’s part, saying it could help them stay relevant and keep drug costs down. They also say that Humana’s Medicare presence fits with Walmart’s customers and that it will increase in-store traffic, and therefore sales, for Walmart as a whole. Lastly, they claim that Walmart may save big by using Humana for their employees’ health benefits.
The Street: Walmart and Target Look Like They Are Freaking Out Because of Amazon
WSJ: Healthy Skepticism About Walmart and Humana
Fast Company: Walmart and Humana: Can we just get through one week without a giant merger talk?
Those against the merger focus on the negative effects for consumers. They say large mergers like these often result in less consumer choice, less competition, and unfair markups. They also call Walmart's potential tie-up a "wager", saying the merger attempt may backfire since the Trump administration has been critical of health care consolidation.
Mergers are so in right now
Mergers and acquisitions reached a record high in the first quarter of 2018, with $1.2 trillion in deal value. U.S. tax reform and global economic growth are a couple reasons why. The biggest mergers, however, have made consumer protection agencies wary. The AT&T-Time Warner merger came under fire for antitrust and the CVS-Aetna deal may be on a similar path to being blocked by the DoJ. A Walmart-Humana merger deal wouldn't be a cakewalk.
When the DoJ tells Walmart they can't buy Humana
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