UnitedHealth Group has
won Federal Trade Commission approval of its $4 billion acquisition of DaVita
Medical Group following a regulatory process that has dragged on for months in
part due to the deal’s complexity.
First announced in early December of 2017, UnitedHealth’s
$4.3 billion acquisition of DaVita Medical from DaVita Inc. has had closer
scrutiny from regulators than expected. It’s been unusual for UnitedHealth, an
acquisitive company that has built up its Optum health services business into a
giant with more than $100 billion in annual sales through organic growth and
other doctor practice and outpatient center acquisitions with few glitches.
The FTC's approval is
expected to be officially announced this afternoon, according to sources close
to the deal. UnitedHealth Group nor Optum could be reached for comment.
The DaVita Medical
transaction was originally expected to close in 2018, but that changed after
the acquisition price fell by about $600 million from $4.9 billion. And
in a regulatory filing last year, Davita said it expected to close the
transaction “in the first quarter of 2019.” That deadline, too, was missed.
Once it closes,
UnitedHealth’s Optum will gain a large network of nearly 300 medical clinics
that treat more than 1.7 million patients annually, the companies have
said. “It is a critical part of the strategy that we have around
reinventing health care delivery to access more markets and at the same time
then go much deeper into those markets to make them work much more
effectively,” UnitedHealth Group CEO David Wichmann told analysts on the
company’s first quarter earnings call earlier this year.
The deal the latest in an
ongoing battle in the healthcare industry to put providers of medical care
under the same umbrella as health insurance companies. Pharmacy giant CVS
Health last year bought Aetna, the nation’s third-largest health insurer,
insurer Humana has been signing deals with multiple providers including
drugstore giant Walgreens Boots Alliance, and big Blue Cross and Blue Shield
plans including Anthem and Health Care Service Corp. are investing in primary
care providers.
DaVita Medical Group is a
subsidiary of DaVita Inc., which is a large provider of kidney care and
dialysis services across the U.S. UnitedHealth is not acquiring the kidney
cares centers. The DaVita operations sold to Optum include urgent care
centers, surgery centers and medical clinics with primary care doctors and
specialists in California, Colorado, Florida, Nevada, New Mexico and Washington
State.
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