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07/21/2022

Amazon makes $3.9 billion healthcare move — third biggest acquisition to date

Dan Berthiaume
Senior Editor, Technology
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Amazon is taking a big step into health care.

Amazon has made another big move into health care.

The company has entered into an agreement to acquire One Medical, a membership-based primary health care provider, for $3.9 billion, including debt.  The San Francisco-based health care startup offers a combination of in-person, digital and virtual care services, promising members “24/7 access to virtual care.” Amazon is paying $18 a share in cash.

In a statement, Neil Lindsay, senior VP of Amazon Health Services, said that Amazon believes “health care is high on the list of experiences that need reinvention.”

“We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years,” he said. “Together with One Medical’s human-centered and technology-powered approach to health care, we believe we can and will help more people get better care, when and how they need it.”

The acquisition — Amazon’s third largest behind Whole Foods Market ($13.7 billion) and MGM ($8.45 billion) — comes as Amazon continues to position itself as a provider of on-demand healthcare services. The company now offers its Amazon Care service nationwide, and will roll out in-person care services to more than 20 new cities this year. Amazon Care provides immediate access to a wide range of urgent and primary care services, including COVID-19 and flu testing, vaccinations, treatment of illnesses and injuries, preventive care, sexual health, and prescription requests and refills. When issues can’t be resolved over video, Amazon Care will dispatch a nurse practitioner to a patient’s home.

Chief Amazon rival Walmart is also making inroads into the burgeoning digital health care market. In January 2022, Walmart expanded a partnership with clinical laboratory Quest Diagnostics, following other health care acquisitions such as multi-specialty telehealth providerMeMD and health care app developer CareZone.

One Medical has 188 medical offices in 25 markets and counts 767,000 members, according to its latest SEC filing.In official comments, executives from both Amazon and One Medical stressed that the deal would make health care more accessible, affordable and convenient.

As part of the transaction, investment firm The Carlyle Group, which made a minority investment of up to $350 million in One Medical in 2018, will exit its position in the company. 

“Booking an appointment, waiting weeks or even months to be seen, taking time off work, driving to a clinic, finding a parking spot, waiting in the waiting room then the exam room for what is too often a rushed few minutes with a doctor, then making another trip to a pharmacy – we see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days,” said  Lindsay. “We look forward to delivering on that long-term mission.”

“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” said Amir Dan Rubin, CEO, One Medical. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers. We look forward to innovating and expanding access to quality health care services, together.”

The deal is subject to customary closing conditions, including approval by One Medical's shareholders and regulatory approval. Upon completion, Rubin will remain as CEO of One Medical.