A merger between Cigna and Humana that would have created a gigantic $140 billion healthcare conglomerate has been called off

• Cigna and Humana called off a potentially massive merger.
• The deal between the two companies would have created a $140 billion conglomerate.
• Cigna still believes a merger with Humana has merit, The Wall Street Journal reported.

Cigna is giving up on its merger with Humana, which would have created a healthcare giant worth $140 billion, according to reports.

The deal between Cigna and Humana would have created a massive conglomerate that would have helped it compete with the nation's largest healthcare company UnitedHealth Group, which has a market value of about $500 billion, Business Insider previously reported.

The deal fell through after Cigna and Humana couldn't come to agreement on price and other financial terms, people familiar with the matter told The Wall Street Journal. Cigna is instead turning its focus to smaller acquisitions.

While Cigna primarily provides health plans for larger employers, combining with Humana could have given the company a powerful footing in Medicare Advantage, the lucrative, private health-plan market for people 65 and older.

According to The Wall Street Journal, people close to the deal said Cigna would have acquired Humana in a cash-and-stock transaction with a large stock component.

This revelation caused Cigna stock to drop nearly 10% as investors began to question the wisdom of using the company's stock as currency, according to the outlet.

Despite the fall-through, Cigna is still open to the idea of a combination with Humana and believes the deal would have been achievable from a regulatory perspective, despite the Biden administration's tough stance on mergers, the report says.

Antitrust experts previously told Business Insider that even with divestitures the companies would have a hard time convincing skeptical antitrust enforcers that their merger wouldn't have harmed competition and consumers.

"The parties have an incredibly daunting task ahead of them," David Balto, a consumer advocate and the former policy director of the Federal Trade Commission said. "The agencies are much stronger enforcers than they were back in 2016. They are much more skeptical about some of the arguments that will be crucial to the merging parties, such as the role of efficiencies."

Instead of the merger Cigna is planning an additional $10 billion of stock buybacks, The Wall Street Journal reported.