U.S. health insurer UnitedHealth Group Inc. (NYSE: UNH) today announced that it is acquiring Brazilian health insurer Amil Participacoes S.A. for $4.3 billion in cash. The total deal is worth $4.9 billion, but UnitedHealth also receives a realizable tax benefit of $600 million.
Approximately 70% of Amil's stock is controlled by the company's two founders, and UnitedHealth will acquire 90% of the company in two transactions. Approval for the deal is expected in the fourth quarter of this year, and at that time UnitedHealth will purchase about 60% of the shares from controlling shareholders and management. In the first half of 2013, UnitedHealth will issue a tender for the 30% of shares in public hands.
Amil's founder, chairman and CEO, Dr. Edson Bueno, and his partner will retain 10% of Amil's stock for at least five years. Dr. Bueno will continue in his roles as chairman and CEO of the company and will get a seat on UnitedHealth's board of directors.
Amil owns 22 hospitals in Brazil and claims 5 million enrolled subscribers to whom it provides health and dental benefits, hospital, clinic and other services. United Health's CEO said:
Combining Amil, the clear market leader serving an under-penetrated market of nearly 200 million people, with UnitedHealth Group's experiences and capabilities developed over the last three decades is the most compelling growth and value creation opportunity we have seen in years.
UnitedHealth's shares are inactive in the premarket this morning, having closed at $57.13 on Friday. The stock's 52-week range is $42.86 to $60.75.