Managed Care Firms Bulk Up

Cigna's stock was up 1.1% to $49.83 Tuesday following the news.

Borsch has placed his own price target on Cigna under review while he fully analyzes the transaction. His firm, which has investment banking ties to Cigna, included the company on its "Americas Buy List" even before news of the deal first surfaced.

Meanwhile, CIBC World Markets analyst Carl McDonald portrayed the deal as a good one for both parties involved. McDonald has an outperform rating and a $58 price target on Cigna's stock. His firm seeks to do business with the companies it covers.

"At first glance, the health care business of Great West Life doesn't look like much [since] earnings have been essentially flat for the last few years as has the company's enrollment," McDonald wrote on Tuesday. "However, the key here is that this is a business worth far more to Cigna than it is to Great West."

Until now, McDonald noted, Great West has lacked the volume necessary to drive bargains like those demanded by health insurers that dominate their markets. But as part of a national powerhouse, that obstacle should immediately disappear, he predicted.

Double Play

While the Cigna acquisition bears similarities to UnitedHealth's Fiserv Health buy, it does lack one component. UnitedHealth not only snatched up a regional health insurer, but an attractive pharmacy benefit manager to boot.