Amazon completed its $3.9 billion acquisition of primary care chain One Medical on Wednesday, significantly increasing its healthcare offerings with the addition of physical medical clinics.
The deal closed without a challenge from regulators, after the Federal Trade Commission missed its window to sue, according to multiple reports. However, antitrust enforcers will continue their investigation into the merger.
The all-cash deal for One Medical was announced in July, with Amazon nabbing the company at $18 a share. The technology giant has been foraying into healthcare for years, including with an online pharmacy, telemedicine and wearables, but this is a major step for Amazon in the industry, as it reinvigorates long-held plans to sell healthcare services to employers.
“We're on a mission to make it dramatically easier for people to find, choose, afford, and engage with the services, products, and professionals they need to get and stay healthy, and coming together with One Medical is a big step on that journey,” said Neil Lindsay, senior vice president of Amazon Health Services, in a statement on the close.
The transaction gives Amazon a network of more than 220 medical offices in 27 markets across the U.S. One Medical, which closed out 2022 with 836,000 total members, has more than 9,000 enterprise clients, according to the company’s most recent 10-K.
Amazon is offering One Medical memberships to new customers at a discount for a limited time, according to the company’s release.
Regulators appeared poised to challenge the deal earlier this year, amid reports that the FTC was preparing a potential antitrust lawsuit against Amazon over anticompetitive business practices. The FTC investigated the deal for at least five months, according to documents.
In September, One Medical and Amazon received a request for additional information from regulators, in connection with the FTC’s review of the merger. According to reporting from The Wall Street Journal, one concern for regulators is whether Amazon might use the data of One Medical patients for other purposes than what users allowed.
The FTC’s probe into the transaction remains open, despite the deadline for antitrust review, according to the WSJ.
Amazon’s acquisition of One Medical kicked the primary care M&A frenzy into high gear last summer. In the latest move, CVS Health earlier this year announced it plans to buy value-based provider Oak Street Health for $10.6 billion.
Despite the big-ticket buy, Amazon’s healthcare ambitions haven’t always panned out. Last year, the company shuttered Amazon Care, its bid at providing primary care services with telehealth capabilities, after the business failed to gain traction among corporate clients.
In addition, Amazon’s effort to lower healthcare costs for employers in partnership with Berkshire-Hathaway and J.P. Morgan, called Haven, flamed out in 2021 after a few years.
Before the deal’s closing was announced, San Francisco-based One Medical reported fourth-quarter earnings aftermarket on Tuesday. Net revenue was $1.1 billion in 2022, up 68% year over year, but the company’s net loss swelled to $398 million as medical claims and other expenses grew.