M&A News: Under Siege United Health Ready to Ditch Latin American Arm for $1B

Shares in troubled UnitedHealth Group (UNH) were higher today as it reportedly eyes a $1 billion deal to sell its Latin American business.

Four Bids

In a report by Reuters, the largest U.S. healthcare insurer is said to be weighing multiple bids for Banmedica.

It is understood that the company has four non-binding bids for its Banmedica subsidiary, which operates in Colombia and Chile, for about $1 billion. The deadline for binding proposals is believed to be in July.

UnitedHealth has reportedly received bids from Washington, D.C.-based private equity firm Acon Investments; São Paulo-based private equity firm Patria Investments; Texas non-profit health firm Christus Health; and Lima-based healthcare and insurance provider Auna.

Troubled Times

Banmedica’s annual earnings before income taxes, depreciation and amortization, or EBITDA, is more than $200 million a year. However, the group is considered too small by UnitedHealth.

It serves over 2.1 million consumers through its health insurance programs and has around 4 million patient visits annually across its network of 13 hospitals and 143 medical centers.

According to the report, UnitedHealth Group, which left Brazil in 2023 and Peru in March, has been looking to exit Latin America since 2022, but the urgency behind this has increased in recent months given the blows the stock has taken recently.

This has included the murder of chief executive Brian Thompson in New York last December, his replacement Andrew Witty departing for personal reasons, a report that the firm was under criminal investigation for alleged Medicare fraud, and poor earnings performance.

Its share price is down a huge 45% over the last 6 months.

Is UNH a Good Stock to Buy Now?

On TipRanks, UNH has a Moderate Buy consensus based on 19 Buy, 6 Hold and 1 Sell rating. Its highest price target is $525. UNH stock’s consensus price target is $369.73 implying a 21.93% upside.

See more UNH analyst ratings