Amazon makes deeper health push with US$3.49b One Medical deal

AMAZON.COM said on Thursday (Jul 21) it would buy primary care firm One Medical for US$3.49 billion, adding brick-and-mortar doctors' offices to its arsenal as the e-commerce giant pushes deeper into healthcare.

The all-cash deal heralds a dramatic expansion of Amazon's healthcare ambitions, having piloted virtual care visits for Amazon employees in Seattle in 2019 before offering such services to other employers and in other cities under the Amazon Care brand.

"We think healthcare is high on the list of experiences that need reinvention," said Neil Lindsay, senior vice president of Amazon Health Services.

In One Medical, Amazon is aiming to acquire a company with brand-name customers such as Airbnb Inc and Alphabet Inc's Google, according to its Website.

One Medical is a primary care provider that offers both telehealth services and options to meet doctors in person at its 182 offices, scattered across 25 markets in the United States.

The e-commerce giant agreed to pay US$18 for each share of One Medical, representing a premium of 76.8 per cent relative to the healthcare firm's closing price on Wednesday. One Medical shares were trading at US$16.95.

The deal is valued at US$3.9 billion including One Medical's net debt.

The news knocked down the stock of telehealth leader Teladoc Health by 8 per cent in morning trading. Shares of drugstore retailers CVS Health and Walgreens Boots Alliance fell over 2 per cent.

Amazon Care itself picked up Hilton Worldwide Holdings as a key customer in a deal announced last year.

Until now, the retailing giant has partnered with a different company called Care Medical, focused on serving Amazon Care users, to enable house calls in places such as the Washington-Baltimore metro area.

There is a minimal anti-trust risk with the deal, given Amazon's limited healthcare footprint, Evercore ISI analyst Elizabeth Anderson said in a note. REUTERS