Stock Market News

Amazon strikes $3.5 billion deal for One Medical in long march into U.S. healthcare

2022.07.21 22:23

Amazon strikes $3.5 billion deal for One Medical in long march into U.S. healthcare
FILE PHOTO: An Amazon logo is pictured at a logistics centre in Mannheim, Germany, September 17, 2019. REUTERS/Ralph Orlowski/File Photo

By Manas Mishra and Jeffrey Dastin

(Reuters) – Amazon.com Inc (NASDAQ:AMZN) on Thursday agreed to buy primary care provider One Medical for $3.49 billion, expanding the e-commerce giant’s virtual healthcare and adding brick-and-mortar doctors’ offices for the first time.

The all-cash deal would combine two relatively small players as Amazon continues a years-long march into U.S. healthcare, seeking to grow at a faster pace.

The online retailer first piloted virtual care visits for its own staff in Seattle in 2019 before offering services to other employers under the Amazon Care brand. It likewise bought online pharmacy PillPack in 2018, underpinning a prescription delivery and price-comparison site it later launched.

“We think healthcare is high on the list of experiences that need reinvention,” said Neil Lindsay (NYSE:LNN), senior vice president of Amazon Health Services.

The Seattle-based retailer has signaled its ambitions to improve and speed up care. However, a big idea akin to how Amazon has automated the role of cashiers in grocery stores has yet to emerge.

In One Medical, Amazon is acquiring a loss-making company with 767,000 members and enterprise clients such as Airbnb Inc and Alphabet (NASDAQ:GOOGL) Inc’s Google, which offer its services as a benefit to employees, according to its website and recent financial results.

Larger rival Teladoc (NYSE:TDOC) Health Inc, by contrast, has more than 54 million paying members in the United States and double One Medical’s quarterly revenue. News of the Amazon deal sent shares of Teladoc as well as drugstore retailers CVS Health Corp (NYSE:CVS) and Walgreens Boots Alliance (NASDAQ:WBA) Inc down between 0.3% and 1.8%.

The acquisition makes sense as the “blending of virtual and in-person care is core to both One Medical and Amazon Care’s strategy,” said Citi analyst Daniel Grosslight.

DEAL SCRUTINY EXPECTED

Amazon Care recently made its virtual care accessible nationwide and added the option for house-calls in Los Angeles, Washington, Dallas and elsewhere. The COVID-19 pandemic helped increase demand as Amazon Care started signing up clients including Hilton Worldwide Holdings (NYSE:HLT) Inc.

One Medical, founded in 2007, now gives Amazon 188 medical offices, its recent financial report showed.

Carlyle Group (NASDAQ:CG) Inc, which had paid $350 million for a minority stake in One Medical in 2018, will exit its position as part of Amazon’s acquisition, people familiar with the matter said.

Amazon agreed to pay $18 for each share of One Medical, a premium of 76.8% to the healthcare firm’s last close. One Medical shares were trading at $17.12.

The deal is valued at $3.9 billion including One Medical’s net debt.

Amazon’s limited healthcare presence should minimize antitrust issues, but risks remain, analysts said.

Grosslight said Amazon “does seem to have a target on its back, and the DOJ (the U.S. Department of Justice) has been very aggressive in blocking deals recently.”

“That will most definitely subject this acquisition to more scrutiny than normal.”

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 84,022.51 1.87%
ethereum
Ethereum (ETH) $ 1,919.89 0.81%
tether
Tether (USDT) $ 1.00 0.02%
xrp
XRP (XRP) $ 2.39 3.69%
bnb
BNB (BNB) $ 591.58 1.86%
solana
Solana (SOL) $ 133.19 6.40%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.734518 2.96%
dogecoin
Dogecoin (DOGE) $ 0.17213 1.51%
tron
TRON (TRX) $ 0.22142 1.24%
staked-ether
Lido Staked Ether (STETH) $ 1,917.91 1.17%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 83,773.45 2.40%
pi-network
Pi Network (PI) $ 1.44 14.63%
leo-token
LEO Token (LEO) $ 9.75 0.07%
chainlink
Chainlink (LINK) $ 13.80 2.70%
stellar
Stellar (XLM) $ 0.273218 0.19%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,296.35 1.06%
usds
USDS (USDS) $ 0.999973 0.14%
hedera-hashgraph
Hedera (HBAR) $ 0.191434 0.66%
avalanche-2
Avalanche (AVAX) $ 18.60 0.67%
sui
Sui (SUI) $ 2.35 7.73%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 1.53%
the-open-network
Toncoin (TON) $ 2.91 3.75%
litecoin
Litecoin (LTC) $ 91.41 2.13%
bitcoin-cash
Bitcoin Cash (BCH) $ 333.49 1.85%
polkadot
Polkadot (DOT) $ 4.25 4.98%
mantra-dao
MANTRA (OM) $ 6.37 2.01%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.04%
weth
WETH (WETH) $ 1,919.47 0.78%
bitget-token
Bitget Token (BGB) $ 4.40 4.18%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.28%
hyperliquid
Hyperliquid (HYPE) $ 14.48 7.42%
whitebit
WhiteBIT Coin (WBT) $ 28.48 1.18%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,039.34 1.05%
monero
Monero (XMR) $ 209.95 0.98%
uniswap
Uniswap (UNI) $ 6.08 3.22%
susds
sUSDS (SUSDS) $ 1.04 0.06%
aptos
Aptos (APT) $ 5.29 2.69%
dai
Dai (DAI) $ 0.999716 0.01%
near
NEAR Protocol (NEAR) $ 2.64 0.01%
pepe
Pepe (PEPE) $ 0.000007 1.49%
ondo-finance
Ondo (ONDO) $ 0.865864 3.17%
okb
OKB (OKB) $ 45.52 8.72%
internet-computer
Internet Computer (ICP) $ 5.67 2.76%
ethereum-classic
Ethereum Classic (ETC) $ 17.91 2.12%
aave
Aave (AAVE) $ 173.91 6.11%
gatechain-token
Gate (GT) $ 21.37 4.31%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 83,991.50 2.33%
mantle
Mantle (MNT) $ 0.734962 0.64%
official-trump
Official Trump (TRUMP) $ 11.94 2.17%