Analysts: Walmart-Humana Deal Doable, But A Possible Distraction

Oliver Chen, an analyst with Cowen & Co., places the odds of an acquisition of Humana by Walmart as high as 40%. He said odds are as high as 80% the two will arrange a partnership or some type of joint venture.

Chen said there are many direct synergies in a possible deal but it would be only slightly accretive to Walmart shareholders in an cash/debt deal. He said Walmart could use its 4,800 locations as leverage along with its 140 million weekly customers and its plethora of consumer data. Humana has it own mounds of data and healthcare expertise.

Chen said Walmart benefits from shoppers who purchase pharmacy and grocery because they spend about 3.5% more than a typical grocery shopper. He also said healthcare is a multi-generation play for Walmart.    MORE

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