UnitedHealth to Combine with Brazilian Amil

UnitedHealth Group (Minnetonka, MN, USA) will merge with Amil Participacoes (Rio de Janeiro, Brazil), Brazil's largest health insurer and hospital operator, in a move designed to place a foothold in the largest and fastest growing private health care market in the Americas.

The two companies will combine their distinctive resources and advanced technology to help modernize the performance of the health systems and serve the health care needs of consumers in their markets in the Americas. As per the details of the merger, UnitedHealth Group will acquire 90% of the outstanding common shares of Amil for approximately USD 4.9 billion in cash. This includes realizable Brazilian tax benefits worth an estimated present value of USD 600 million, bringing the effective equity purchase price to approximately USD 4.3 billion.

Amil’s market position has been built through a focus on innovative products, responsive service, strong brands, and affordable access to private healthcare delivery resources, via a distinctive care delivery model which efficiently integrates health benefits with care services on a selective basis. This includes 22 hospitals and nearly 50 clinics, plus a number of leading specialty and preventive care outpatient clinics and emergency care centers.

“Brazil has emerged as 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,” said Stephen J. Hemsley, president and CEO of UnitedHealth Group. “Combining Amil, the clear market leader serving an under-penetrated market of nearly 200 million people, with UnitedHealth Group’s experiences and capabilities developed over the last three decades is the most compelling growth and value creation opportunity we have seen in years.”

“Our union with UnitedHealth Group will enable us to bring advanced technology, a tradition of practical innovation, service initiatives and clinical programs to further strengthen health care in Brazil, and enable Amil to grow faster and do more to care for patients and serve consumers as a leading Brazilian company,” said Edson Bueno, MD, founder and CEO of Amil.

Brazil’s economy is booming, with average gross domestic product (GDP) per capita growing at a compound annual rate of 19.4% percent since 2003, and a GDP per capita almost 2.5 times that of China. As a result, demand for private health care coverage continues to rise in Brazil, rising from 35 million people in 2005 to nearly 48 million in 2011. Despite this growth, only 25% of the population enjoys private healthcare coverage, compared with nearly 80% penetration in the United States.

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Amil Participacoes