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UnitedHealth acquires DaVita Medical Group for $4.9bn

UnitedHealth

Following on from the merger of CVS Health and Aetna, DaVita Medical Group’s clinics have been acquired by UnitedHealth for $4.9bn. Subject to regulatory approval, the deal will see DaVita become part of United’s Optum unit, encompassing its outpatient operations, covering homecare, consulting, clinics and its pharmaceutical operations. 

The merger of CVS Health and Aetna highlights how the US healthcare industry is continuing to transform in the face of political uncertainties, alongside the utilisation of new technologies to drive down increasing healthcare costs and provide increased value to patients.

Through the acquisition, DaVita’s 2,000 strong team will merge with UnitedHealth’s 30,000 strong workforce, who will work to support DaVita’s 300 clinics and over 1.5mn patients across six US states.

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With a $5mn operating loss in its third quarter, DaVita aims to further undergo “significant stock repurchases,” within its operations following the close of the deal, all of which will further improve its future in the healthcare industry.

“This acquisition fits right into UNH’s [UnitedHealth Group’s] plan to direct patients from high-cost hospital settings to lower-cost urgent care and outpatient facilities and will leverage its vast physician footprint to accelerate that change,” commented Raymond James analyst Michael J.

One company sure to benefit from the acquisition is Berkshire Hathaway, which holds a 20% stake in the company. The deal has seen Berkshire gain over $231mn, and has seen DaVita shares rise significantly upon the announcement.

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