UnitedHealth Group Inc. will spend about $4.9 billion in cash to buy a majority stake in Brazilian health benefits and hospital services provider, as the largest U.S. health insurer takes a big leap toward international growth.
UnitedHealth, based in Minnetonka, Minn., said Monday that it will acquire about 90 percent of the outstanding shares of Amil Participacoes SA. The purchase price drops to $4.3 billion when counting Brazilian tax benefits.
Amil Participacoes, which is publicly traded in Brazil, provides health and dental benefits and runs a care delivery network that includes 22 hospitals, about 50 clinics. UnitedHealth said the Brazilian company serves more than 5 million people.
UnitedHealth currently operates in 70 countries, and its services include expatriate coverage for people living outside their home countries. But a spokesman says the insurer's international operations are a relatively small slice of its total business, which is largely focused in the United States. UnitedHealth revenue totaled $101.9 billion last year.
UnitedHealth and competitors like Cigna Corp. have pushed to increase their international operations in recent years, as enrollment growth in the U.S. market slowed.
UnitedHealth said it will buy about 60 percent of the Brazilian company's outstanding shares from controlling shareholders and management after receiving approval from Brazilian regulators, which it expects in the fourth quarter. It will then buy about 30 percent of the shares from public shareholders in the first half of 2013.
Amil's founder, Dr. Edson Bueno, and his partner, Dr. Dulce Pugliese, will retain the remaining 10 percent of the company's stock for at least five years.
Bueno said in a statement the deal "will enable us to bring advanced technology, a tradition of practical innovation, service initiatives and clinical programs to further strengthen health care in Brazil."
UnitedHealth also said Monday it expects third-quarter earnings to be at least $1.45 per share. That trumps analysts' expectations for earnings of $1.25 per share, according to a FactSet survey.
The insurer, which routinely tops Wall Street's quarterly expectations, will release the rest of its results Oct. 16.
UnitedHealth shares finished at $57.13 on Friday. Its shares have slipped 6 percent from a 52-week high of $60.75 on June 19. They traded as low as $42.86 last October.
- Mergers, Acquisitions & Takeovers