The companies are discussing a stock-and-cash deal that could be finalized by the end of the year, according to the report, without providing details on the deal value

Humana had a market capitalization of roughly $62.84 billion and Cigna had a market value of $83.71 billion, based on Tuesday's closing prices.

Cigna's shares were down 4.4% in noon trading, while Humana's stock was flat.