UnitedHealth Group Inc. will spend about $4.9 billion to buy a majority stake in a Brazilian health benefits and care provider, as the largest U.S. health insurer leaps into an international market it says is primed for growth, The Associated Press reports.
UnitedHealth, based in Minnetonka, Minn., but with major Hartford operations, said Monday that it will pay cash for about 90 percent of the outstanding shares of Amil Participacoes SA. The Brazilian company provides health and dental benefits and runs a care delivery network that includes 22 hospitals, about 50 clinics. It 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 company spokesman Don Nathan said it had only a "very small" presence in Brazil before this deal.
The insurer's international operations also represent a relatively minor slice of UnitedHealth's total business, which is largely focused in the United States. UnitedHealth revenue totaled $101.9 billion last year. Nathan declined to say how much of that came from international markets.
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 while the economy stalled. U.S. pharmaceutical companies also have labeled countries like Brazil as sources for future revenue growth as they face patent expirations for key products in their home markets.
UnitedHealth said about 78 percent of the U.S. market is covered by private health insurance. In contrast, only 25 percent of Brazil's population of 200 million people has such coverage, and only 9 percent of the market has dental benefits, statistics that leave room for growth.
UnitedHealth also said Brazil, which has the world's sixth largest economy, is promoting private sector care to relieve pressure on its publicly funded system.
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