Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

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

Stock Markets Jul 21, 2022 08:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: An Amazon logo is pictured at a logistics centre in Mannheim, Germany, September 17, 2019. REUTERS/Ralph Orlowski/File Photo
 
GOOGL
+6.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AMZN
+4.46%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CVS
+0.99%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WBA
+1.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
LNN
+1.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CG
+4.32%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Manas Mishra and Jeffrey Dastin

(Reuters) -Amazon.com Inc 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 (NASDAQ:AMZN) 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

U.S. Senator Amy Klobuchar, who is also the Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights on Thursday urged the Federal Trade Commission (FTC) to investigate Amazon's proposed deal, expressing concerns over the acquisition's implications for personal health data.

"Amazon has a history of engaging in business practices that raise serious anticompetitive concerns, including forcing small businesses on its site to buy its logistics services as a condition of preferred platform placement, using small businesses' non-public data to compete against them....." the Senator added in her statement.

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."

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

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Eugène Ayena
Eugène Ayena Jul 21, 2022 6:53PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hago el prestamo +23302140483
HD HD
HD HD Jul 21, 2022 2:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
cheaper to buy a whole health network and let that employee insurance money trickle back to you.
Eugène Ayena
Eugène Ayena Jul 21, 2022 2:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hago el prestamo +23302140483
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email