Amazon to push with $3.49 billion One Medical deal

Amazon.com Inc said on Thursday it would buy primary care firm One Medical for $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.

The logo of Amazon is seen at the company’s logistics center in Bretigny-sur-Orge, near Paris, France, December 7, 2021. REUTERS/Gonzalo Fuentes/Files

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 $18 for each share of One Medical, representing a premium of 76.8% relative to the healthcare firm’s closing price on Wednesday. One Medical share was trading at $16.95.

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

The news knocked down the stock of telehealth leader Teladoc Health Inc by 8% in morning trading. Shares of drugstore retailers CVS Health and Walgreens Boots Alliance <WBA.O> fell over 2%.

Amazon Care itself picked up Hilton Worldwide Holdings Inc 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 minimal anti-trust risk with the deal, given Amazon’s limited healthcare footprint, Evercore ISI analyst Elizabeth Anderson said in a note.