This week, American healthcare provider UnitedHealth (
UNH
,
quote
) announced
its agreement to acquire 90%
of Brazilian firm Amil Participacoes (
AMPIF
,
quote
) as the U.S. firm looks to diversify its holdings into other
markets.
[caption id="attachment_66676" align="alignright" width="300"
caption="Brazil remains attractive, especially in the healthcare
sector"]
[/caption]
The $4.9 billion deal comes as little surprise; the move was a
somewhat telegraphed affair after the
Financial Times
reported last week
that the two companies were in talks over a potential takeover.
The move is especially imported for UnitedHealth. The firm has
expressed concerns over the implementation of new insurance
measures by the government potentially adversely affecting the
firm's profitability.
As a result, UnitedHealth is looking to overseas markets where
regulation will be less likely to impact the company. Healthcare in
emerging markets was a natural place for UnitedHealth to look,
given these already sizable markets, quickly growing median
incomes, and large populations.
As stated by UnitedHealth CEO, the company was particularly keen
on Brazil (
EWZ
,
quote
) due to the fact that the country "has emerged as a consistently
growing and evolving market for private sector health benefits and
services...Its growing economy, emerging middle class and
progressive policies toward managed care make it a high potential
growth market."
UnitedHealth's foray into Brazil is not their first venture
abroad; the company has exposure to such disparate markets as
Portugal, India, and the Middle East.
Because of the company's increasing exposure to markets outside
of the United States, the company could now be considered a play on
emerging markets. While it remains to be seen just how the company
will be affected by political matters in the upcoming year
--whether the Affordable Care Act is fully implemented or repealed
will factor greatly into UnitedHealth's forecasts-- a favorable
outcome for the healthcare provider in the election, combined with
increased emerging market exposure, could propel UnitedHealth's
stock higher.
