UnitedHealth Takes a Big Step Back from South America
UnitedHealth has made a significant strategic move by agreeing to sell its South American business to Patria, a private equity firm. The deal is valued at an impressive $1 billion.
Key Details:
- Final Agreement Signed: Saturday
- Announcement Expected: Monday
- Sources: Anonymous due to the private nature of the talks
Background:
This isn't UnitedHealth's first attempt to exit Latin America. They have been trying to leave the region since 2022. They have already sold their businesses in Brazil and Peru. The sale of Banmedica, which operates in Colombia and Chile, has been in the works for nearly a year.
Banmedica's Scale:
As of June, Banmedica had:
- 1.7 million health insurance plan members
- 7 hospitals
- 47 medical centers
UnitedHealth's Strategy:
This sale is part of UnitedHealth's broader plan to focus on their core business. CEO Stephen Hemsley is leading this turnaround, aiming to regain investor and consumer trust after a challenging period.
Financial Context:
- 2023 Loss: UnitedHealth incurred an $8.3 billion loss from selling their South American operations.
- CEO Return: Hemsley returned as CEO in May, having previously led the company from 2006 to 2017.
- Profit Forecast: UnitedHealth raised its annual profit forecast in October.
- Growth Plans: The company aims to return to growth in 2026 and accelerate that growth in 2027.
Future Outlook:
Neither Patria nor UnitedHealth has commented on the deal yet. However, it's clear that UnitedHealth is making big changes, focusing on their core business and leaving South America behind.
