Spring Speculation Has Sprung: Walmart, Amazon, Trump And Target

Data Dive: Intuit, Zillow And Amazon

Spring, after a long delay, has arrived. It seems to have (mostly) stopped snowing, the April Fools’ Day Easter baskets have been put away, and now it’s time to see what green shoots will peek through and grow.

Like, for instance…

Will Walmart Buy Humana?

If last week’s reports are accurate, Walmart is reportedly in early-stage talks to acquire Humana, the 13-million-member health insurance company based in Louisville, Kentucky.

If it happens, the deal would very likely mark Walmart’s largest-ever acquisition. Humana’s market cap last week was $37 billion, meaning its purchase would dwarf the current title holder for Walmart’s largest purchase: the $10.8 billion it paid for Asda in 1999.

Citing people familiar with the matter, The Wall Street Journal reported that it’s not clear what terms are being negotiated, or if a deal will happen. The two sides are reportedly discussing options, one of which is acquisition.

If the deal passes muster with the regulators, such an acquisition would make Walmart one of the country’s largest health insurance companies.

Walmart currently operates pharmacies in close to 4,700 stores in the U.S., as well as in many of its Sam’s Club warehouse stores and in primary care clinics. It has been pushing further into the healthcare market, recently announcing that it was gearing up to work with a big lab company to provide lab testing services. Walmart also recently announced a healthcare partnership with TSYS to make it easier for health plans to reward patients for compliance with health regimens.

Humana – with its focus on Medicare patients – would also give Walmart larger reach into senior citizen markets, as Humana is currently the second-largest provider of Medicare Advantage plans. The company controls about 17 percent of that market, with 3.5 million patients insured.

And, of course, Walmart would get the benefit of more foot traffic in the store.

Walmart’s move comes as a lot of big plays – and players – have emerged in the healthcare market – a move stimulated, most experts agree, by Amazon’s announcement last year that it was planning a bigger push into healthcare. More recently, Amazon has also announced it is teaming up with JPMorgan Chase and Berkshire Hathaway to create a new kind of healthcare company for their collective pool of employees, and is expected to enter the market in a big way. It also recently expanded its Prime program to Medicaid recipients, who are a key demographic for Walmart and among the beneficiaries of its Directed Spend program.

President Trump’s Amazon Card

According to reports in Axios last week that cited five sources, President Trump is said to be “obsessed” with hating Amazon, and is looking at ways to change the eCommerce giant’s tax treatment. One source told Axios that the president wondered out loud if the government could go after Amazon from an antitrust or competition standpoint.

One source noted that Trump thinks Amazon is destructive of small business. Another said that Trump’s friends in retail have been harmed by the Amazon effect, and blame the eCommerce giant for destroying physical retail. According to the report, the president agrees with those assumptions.

Trump is also apparently concerned that Amazon is harming the USPS, though that is demonstrably not the case.

“The whole post office thing, that’s very much a perception he has,” a source said in the report. “It’s been explained to him in multiple meetings that his perception is inaccurate and that the post office actually makes a ton of money from Amazon.”

Tons of money it needs to pay for a postal service with a huge pension and healthcare liability, not to mention the requirement to deliver mail to every single person in the United States – most of which is now actually junk mail.

The Axios story went on to say that a source mentioned the president also has an issue with Amazon CEO Jeff Bezos’ ownership of The Washington Post, which has been behind some breaking news about the White House that doesn’t portray Trump in the best light.

However, about a day after those reports surfaced, the White House seemed to say that it was untrue, and that the administration had no plans to go after Amazon.

That denial, however, was somewhat undercut by President Trump’s tweets on the matter.

“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” Trump tweeted early on Thursday, March 29.

Nonetheless, White House spokeswoman Lindsay Walters said on Thursday that Trump isn’t discussing any new actions against Amazon.

Amazon shares fell as much as 4.5 percent in morning trade after the tweets, but recovered and closed up just over 1 percent.

Amazon declined to comment on the president’s remarks.

Target and Kroger: The Big Deal That Will Not Be

Rumors swirled early last week that Target and Kroger were in merger talks, but it seems no such deal is on the horizon. A source told Fast Company that there’s “no truth” to those rumors.

According to previous reports, the two firms allegedly first started talking last summer about a partnership that would not only boost Target’s lagging grocery business, but also give Kroger customers access to more merchandise and eCommerce. It went on to note that the two firms were considering whether a merger would be their best move in an increasingly competitive retail and grocery environment.

A merger would help Target compete with Amazon, which acquired Whole Foods Market for $13.7 billion last year.

The firms seemed to be drawing closer to a deal when Target hired a former Kroger exec, Jeff Burt, to head its grocery department, and redesigned the grocery departments in its locations as part of a bigger remodeling strategy.

Neither firm has officially commented on the rumors one way or the other. For now, denial is the name of the game.