The possible deal would bring Walmart deep into health care

NEW YORK — According to a report in The Wall Street Journal on Friday, Walmart and health insurer Humana are in early talks regarding a possible merger.

WSJ says it isn’t clear what terms the companies may be discussing, and the story said there is no guarantee they will strike a deal. However, if they do, the deal would be huge: Humana currently has a market value of about $37 billion.

The possible deal would also be Walmart’s largest acquisition ever, eclipsing its 1999 purchase of the U.K.’s Asda Group PLC for $10.8 billion. Walmart, which in addition to being the world’s biggest retailer is also a major drug store operator, has a market value of about $260 billion.

Humana currently has 2.4 million Medicare Advantage members, and it is one of the nation’s largest providers of the plans. WSJ’s report said that in addition to the roughly 17% share of the Medicare Advantage market, a deal would offer Walmart a customer boon, alongside potential savings on the retailer’s health plan — it is currently the largest private employer in the country, with around 1.5 million U.S. employees.

The WSJ story says the two companies are discussing a range of options, including an acquisition. Shares of Humana surged 10% to $297 in after-hours trading after WSJ reported the talks. Walmart shares slipped 1% to $88.10 in late action.

The discussions come as health service providers are rapidly pairing off and retailers — particularly large pharmacy chains — are looking to diversify and bulk up in the face of the competitive threat from e-commerce giant Amazon.com.

In December, CVS Health agreed to buy Aetna Inc. in a $69 billion deal aimed at allowing the drug store chain to capture more of the consumer health care spend.