NEW YORK (TheStreet) -- Shares of UnitedHealth Group (UNH) are up by 2.28% to $121.69 in mid-morning trading on Tuesday, after a report from The Wall Street Journal that said the company has contacted fellow health insurer Aetna (AET) in regards to a merger.
The deal may be valued at over $40 billion.
UnitedHealth broached the subject of a merger with Aetna in a letter, sources told The Journal, adding that it is unclear if Aetna has responded.
Several companies within the health insurance sector are looking to consolidate as the industry continues to change. Companies are seeking to capitalize on cost cuts and other benefits, The Journal noted.
Anthem (ANTM) had recently targeted Cigna (CI) for a takeover but the company refused Anthem's offer.
Shares of Aetna are up by 3.66% to $125.44 this morning.
Separately, TheStreet Ratings team rates UNITEDHEALTH GROUP INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITEDHEALTH GROUP INC (UNH) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."