July 21 (Reuters) – Amazon.com Inc (AMZN.O) on Thursday agreed to buy primary care provider One Medical (ONEM.O) 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 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, 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 (ABNB.O) and Alphabet Inc's (GOOGL.O) Google, which offer its services as a benefit to employees, according to its website and recent financial results.
Larger rival Teladoc Health Inc (TDOC.N), 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 (CVS.N) and Walgreens Boots Alliance Inc (WBA.O) 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.
An Amazon logo is pictured at a logistics centre in Mannheim, Germany, September 17, 2019. REUTERS/Ralph Orlowski/File Photo
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 Inc (HLT.N). read more
One Medical, founded in 2007, now gives Amazon 188 medical offices, its recent financial report showed.
Carlyle Group Inc (CG.O), 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."
Our Standards: The Thomson Reuters Trust Principles.
Orange and MasMovil have signed a binding agreement to combine their operations in Spain in a deal valuing the merged entity at close to $19 billion, the two telecoms firms said in a statement on Saturday.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved
Surviving The 2nd Wave of Corona
‘This too shall pass away’ this famous Persian adage seems to be defeating us again and again in the case of COVID-19. Despite every effort