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Icahn faces 'uphill battle;' CVS/Aetna clear DoJ hurdle; disasters hit Munich Re

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Icahn faces 'uphill battle;' CVS/Aetna clear DoJ hurdle; disasters hit Munich Re

Carl Icahn went public yesterday with his opposition to Cigna Corp.'s pending acquisition of Express Scripts Holding Co., blasting the deal's "ridiculous $60 billion valuation." Cigna issued a fiery reply saying the activist investor's letter "demonstrates an uninformed view of the current healthcare marketplace and Cigna's strategy."

With Cigna shareholders set to vote Aug. 24 on the deal, Icahn is "late to the party" and faces "an uphill battle" in persuading other shareholders to vote against the transaction, according to CNBC. Proxy advisory firm ISS is expected to come out with its recommendation Friday. T. Rowe Price Group Inc., a top-three Cigna shareholder, said in an emailed statement to S&P Global Market Intelligence that it does not disclose how portfolio managers intend to vote on upcoming proxies.

There was better news for two other companies in the midst of a megamerger, as sources told Bloomberg News that the U.S. Justice Department's investigation into CVS Health Corp.'s pending acquisition of Aetna Inc. did not turn up any vertical competition issues. The government is focused on competition between the companies in the prescription-drug market.

It's a busy day for earnings in the insurance sector. Germany's Munich Re Co. attributed a 47.5% drop in the second-quarter operating result for its P&C reinsurance segment to a "significant increase" in man-made major losses and higher basic losses, which rose by €352 million year over year. Its shares were down 2.5% as of just before 2 p.m. Munich time.

U.K.-based Prudential PLC was up 2.2% at just before 1 p.m. in London even after reporting that post-tax profit in the first half fell 10%, largely because of a £513 million pretax loss on the reinsurance of £12 billion of U.K. bulk annuities to Rothesay Life. Operating profit of £2.41 billion was up 2% year over year, or 9% at constant exchange rates.

Belgium-based Ageas SA/NV reported second-quarter net result attributable to shareholders of €193.5 million, up from €173.4 million a year earlier. Its combined ratio deteriorated to 96.7% in the quarter from 93.6% a year ago. The company also announced a €200 million share buyback program.

Finnish insurer Sampo Oyj reported an year-over-year increase in second-quarter group profit attributable to owners of the parent to €586 million from €375 million. Group CFO Peter Johansson will retire at the turn of the year, with Knut Arne Alsaker, CFO of business area If P&C Group, replacing him.

Japan-based MS&AD Insurance Group Holdings Inc. reported net income attributable to owners of the parent of ¥83.86 billion for the quarter ended June 30, down 8.5% year over year. It also said its preliminary estimate is that losses related to heavy rains in July will amount to roughly ¥660 million in the six months to Sept. 30.

Click here for a roundup of earnings reported yesterday by select insurance companies covered by S&P Global Market Intelligence.

Prudential Financial Inc.'s Prudential Retirement and Aviva PLC's Aviva Life and Pensions U.K. Ltd. struck their first longevity reinsurance transaction, under which Prudential Insurance Co. of America will assume longevity risk for approximately £1 billion in pension liabilities.

Aegon NV agreed to divest its last remaining substantial block of life reinsurance business to Scor SE unit SCOR Global Life SE. Aegon's Transamerica life subsidiaries will reinsure approximately $700 million of liabilities through SCOR Global Life.

Travelers Cos. Inc. CFO Jay Benet will step down Sept. 1, but continue as vice chairman. Daniel Frey, CFO of the personal insurance segment, will succeed Benet.

The Insurance Insider reported that former QBE Insurance Group Ltd. CEO John Neal, Deloitte insurance partner Clive Buesnel, outgoing XL Catlin executive Paul Jardine and former Aon PLC President Steve McGill are among candidates "generating the most noise" as potential successors to outgoing Lloyd's of London CEO Inga Beale. Jardine is considered "the most popular candidate" for the position, and Neal is being mentioned more frequently in discussions than others.

WellCare Health Plans Inc. priced an offering of 4,528,302 common shares at $265.00 per share. Net proceeds will be used to fund a portion of the cash consideration for its pending acquisition of Meridian Health Plan of Michigan Inc., Meridian Health Plan of Illinois Inc. and MeridianRx.

Now featured on S&P Global Market Intelligence

Insurer-owned bank's expansion talk bucks broader trend: One of a handful of insurer-owned banks that dramatically scaled back its size and scope in response to post-financial crisis regulation is re-evaluating the role that business plays in its overall franchise as others sell or slim down.

Ageas eyes acquisitions in Belgium, Portugal to boost nonlife market share: Ageas is comfortable with its positions in the two countries' life markets, but would consider deals to build out its nonlife presence, potentially including Belgian insurer Fidea should China's troubled Anbang look to sell it, CEO Bart De Smet said.

Trump plans another shot at drug pricing; Zika report highlights looming threat: President Donald Trump vowed that a substantial drop in drug prices is coming; and the Centers for Disease Control and Prevention said 1 in 7 babies exposed to Zika virus before birth had health problems by at least 1 year of age.

In other parts of the world

Asia-Pacific: CBA full-year profit drops; former Malaysian PM to face money laundering charges

Europe: UniCredit unfriends Facebook; Munich Re, ABN Amro report Q2 earnings

Middle East and Africa: Nedbank H1 headline earnings up YOY; Nigerian central banker hints at rate hike

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, Hang Seng climbed 0.39% to 28,359.14, while the Nikkei 225 fell 0.08% to 22,644.31.

In Europe, around midday, the FTSE 100 gained 0.86% to 7,785.15, and the Euronext 100 rose 0.04% to 1,081.78.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

On the macro front

The MBA mortgage applications report and the EIA Petroleum Status Report are due out today.

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