US health insurers are looking for international opportunities due to the fact that the industry faces greater regulation at home as part of the Obama administration’s healthcare reform law.
UnitedHealth, the biggest US health insurer by revenues is looking to become more of a global force in the healthcare industry. It bought PacifiCare for $9.2bn in 2005 and Sierra Health Services for $2.6bn in 2007.
As part of plans to increase its presence in emerging markets, UnitedHealth Group will spend $4.9 billion to acquire a 90 percent stake in Amil Participacoes, the largest healthcare company in Brazil.
By entering the Brazilian healthcare market, UnitedHealth can better access the country’s 200 million population, only 25 percent of which has private insurance, at a time when Brazilian leaders increasingly are turning to private companies to insure its citizens.
Brazil’s Amil Participacoes has about 5 million members, a provider network of 3,300 hospitals and 44,000 doctors, and also owns 22 hospitals and about 50 clinics.
“Brazil is a consistently growing and evolving market for private sector health benefits and services. Its growing economy, emerging middle class and progressive policies toward managed care make it a high potential growth market”, UnitedHealth CEO Stephen Hemsley said Monday in a statement.
“Combining Amil, the clear market leader serving a market of nearly 200 million people, with UnitedHealth Group’s experiences and capabilities developed over the last three decades, is a unique growth and value creation opportunity,” said Mr Hemsley.
Dr Edson Bueno, Amil’s founder will remain chief executive of the unit after the deal closes. Bueno and his partner Dulce Pugliese will retain their 10 percent ownership of Amil for at least five years. Amil also will invest about $470 million in UnitedHealth Group shares, according to the Minneapolis Star-Tribune.
adapted from Reuters and Associated Press reports
