NEW YORK (TheStreet) -- Humana (HUM) shares are up 7.31% to $197.70 in afternoon trading on Thursday as rival health insurer Aetna (AET) closes in on a deal to acquire the company, according to Bloomberg.
The possibility of a health insurance industry consolidation has been weighing on the industry's stocks all week after it was revealed that fellow health insurers Anthem (ANTM) and Cigna (CI) engaged in merger talks over the weekend.
Aetna made an official bid for Humana earlier this week, though terms of the deal were not disclosed, according to Bloomberg sources.
Humana has also received a merger offer from Cigna but its prefers Aetna, sources say.
Analysts have said that the consolidation of the industry is an unintended consequence of the Affordable Care Act, which won an important Supreme Court decision earlier today.
The Court ruled that the federal government can continue issuing subsidies to Americans through the Affordable Care Act, also known as Obamacare.
Insight from TheStreet Research Team
Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust, recently spoke about the consolidation of the health insurance industry in a Real Money Pro blog post. Here is what Cramer had to say:
I am going to use this respite day to dream dreams of takeovers. Why? Because when I see every single health maintenance company, Cigna, Aetna , UnitedHealth ( UNH), Anthem and Humana in talks with each other, it seems logical to bless pretty much anything happening in the merger arena.
-Jim Cramer, 'Google Should Buy Twitter and 9 Other Dream Mergers', 6/16/2015
TheStreet Ratings team rates HUMANA INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation: