Walmart has been making forays into consumer health care for more than a decade. Now, the nation's largest retailer may be looking to play a bigger role in the sector by acquiring Medicare insurance giant Humana — just as its rival Amazon is increasingly making its own moves in the health-care market.
Walmart and Humana are having early-stage talks about strengthening their existing partnership, people familiar with the matter tell CNBC. As part of those talks, an acquisition has also been discussed, but such deal talks are very early stage and may not happen.
For Walmart, a deal to buy Humana would not come cheap: The health insurer had a market valuation of $37 billion, as of Thursday's close. Aetna's failed 2015 acquisition of Humana was valued at $54 billion.
The firms have held preliminary talks exploring a possible combination, including a potential merger, according to the Wall Street Journal.
"Humana is potentially an attractive asset for Walmart as it would help diversify its revenue stream," Cantor Fitzgerald health insurance analyst Steven Halper wrote in a recent report, noting that the retailer and insurer already partner on a co-branded Medicare prescription drug plan.
"But our industry contacts suggest that Humana has been minimizing its relationship with Walmart recently," Halper added.
Walmart may very well want to reinforce its partnership now, partly in response to retail pharmacy giant CVS Health's $69 billion deal to acquire insurer Aetna, and health Cigna's $54 billion proposed merger with pharmacy benefits manager Express Scripts. Additionally, there is a threat of online retailer Amazon's potential entry into the pharmacy business.