UnitedHealth Group agreed on Monday to buy a 90 percent stake in the Brazilian healthcare provider Amil Participações for $4.9 billion, as the American insurer looks to expand in the fast-growing emerging market.
Under the terms of the deal, UnitedHealth, based in Minnetonka, Minnesota, will first buy a 60 percent stake in Amil after receiving regulatory approval in Brazil, which is expected by the end of the year. UnitedHealth will then acquire a further 30 percent stake in the Brazilian healthcare provider during the first half of 2013, the company said in a statement.
After securing an estimated $600 million of Brazilian tax breaks, UnitedHealth said the proposed deal would cost around $4.3 billion.
Amil's founder, Edson Bueno, and business partner, Dulce Pugliese, which currently control around 70 percent of the business, will retain a 10 percent stake in the Brazilian company.
Mr. Bueno also will buy $470 million of UnitedHeath's shares and h old them for at least five years, according to a company statement. Mr. Bueno will continue to run Amil and will also join UnitedHealth's board.
The acquisition will allow UnitedHealth to expand into Brazil's fast-growing market. Amil is one of country's largest healthcare providers with more than five million customers.
“Brazil has emerged as a consistently growing and evolving market for private sector health benefits and services,†said UnitedHealth's chief excutive Stephen J. Hemsley, in a statement. “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.â€
