UnitedHealth Group acquires Amil Participacoes SA
Health insurance giant UnitedHealth Group has announced its acquisition of one of the largest health care companies in Brazil, Amil Participacoes SA. The move is part of UnitedHealth Group’s endeavor to boost its presence in Latin America, a region brimming with demand for health insurance coverage. UnitedHealth Group acquired the Brazilian company for approximately $4.9 billion. The company operates 22 hospitals and 50 clinics located throughout Brazil and boasted of an annual revenue of more than $5 billion.
Move comes as company attempts to boost presence in Latin America
UnitedHealth Group notes that Brazil is home to a rapidly growing economy. New business opportunities are creating jobs and allowing more people a higher degree of financial freedom. As consumers become more financially stable, they are finding that services that were once considered luxurious are now within their reach. As such, the demand for health insurance coverage has begun to grow at an alarming rate, creating a promising opportunity for UnitedHealth Group and any health insurance provider that is operating in the country.
Burgeoning economy presents promising opportunity for insurer
The deal between UnitedHealth Group and Amil Participacoes SA is expected to finalize at some time during the next year. After which, UnitedHealth Group will begin tapping Brazil’s ripe private health insurance market. The insurer believes that only 25% of the Brazilian population has private health insurance coverage. If the company is successful in engaging uninsured Brazilian consumers, it could stand to see major profits from the endeavor.
Companies on acquisition binge due to health care reform
U.S. health insurance companies have been acquiring smaller companies in foreign countries at a high frequency over the last few months. Large companies have also begun to turn their sights on small insurance providers within the U.S. WellPoint Inc. recently finalized the acquisition of Amerigroup Corp. for $4.9 billion and Aetna successfully acquired Coventry Health Care last month. Many of these acquisitions are expected to be due to the Affordable Care Act, which is bringing about significant changes to the health insurance industry in the country.
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