UnitedHealth Group Inc. plans to buy Brazil's largest health care company for an estimated $4.9 billion, giving the company a commanding position for growth in Latin America.
The Minnetonka-based insurance giant said Monday that it will acquire a 90 percent stake of Amil Participacoes, the top health insurer and hospital operator in Brazil, where a rising middle class is creating demand for more health care services and private insurance.
"This is a potentially transformative move for United, where they're establishing a significant operation in an emerging market," said Thrivent Financial's senior health care analyst, David Heupel. "You don't find growth markets with anything close to what Brazil can offer."
Brazil's economy has more than tripled in size since 2005. But only about 25 percent of middle- and upper-income Brazilians have insurance, said Amil's CEO and founder, Dr. Edson Bueno.
Based in Rio de Janeiro, Amil is a publicly traded, $5 billion company that provides health and dental benefits, and hospital and clinical services for about 5 million people. Founded in 1978, it has 22 hospitals and nearly 50 clinics, one of the largest networks in South America.
UnitedHealth, the largest managed-care company in the United States by membership and revenue, has been making forays into the global market in recent years, but the Amil acquisition marks a significant push.
It is United's second-largest purchase since PacifiCare Health Systems in 2005, a $9.2 billion deal that put UnitedHealthcare's membership rolls on par with WellPoint Inc., at the time the nation's largest insurer.
The Amil "transaction effectively puts a stake in the ground and signals their desire to grow outside the U.S.," said Jeffries analyst David Windley, who said in a research note that the deal will represent about 4 percent of United's consolidated revenue.
