United Health Group Incorporated (NYSE:UNH), the largest health insurer in the United States agreed to buy 90 percent stake Amil Participações S.A. (PINK:AMPIY), one of the largest health care providers in Brazil.

Amil Participações has more than 5 million members in Brazil with $4.56 billion market value and it has 5.9 million members. The company provides health and dental benefits, hospital and clinical services as well as advanced care management resources to its members.


According to United Health Group, the amount of the transaction is $4.9 billion. The deal would give the UnitedHealth Group Inc. (NYSE:UNH) the ability to expand its business operations in Brazil, which is one of the fast growing emerging markets in the world.

Based on the agreement, United Health Group will initially buy  a 60 percent stake in Amil Participações S.A. (PINK:AMPIY). The American insurance company will acquire the remaining 30 percent stake within the first six months of 2013.  The proposed transaction will cost around $4.3 billion, after deducting the approximately $600 million tax breaks from the Brazilian government, according to UnitedHealth Group Inc. (NYSE:UNH).

Amil Participações’ founder Dr. Edson Bueno and his business partner, Dulce Pugliese currently own approximately 70 percent of Amil Participações. Bueno and Pugliese will retain 10 percent shares of Amil Participações. In addition, Bueno will purchase shares in United Health Group worth $470 million, and agrees to keep his shares in the company for at least five years. He will continue to serve as chairman and CEO of Amil Participações and will join the board of directors of United Health Group.

In a press statement, Stephen J, Hemsley, president and CEO of UnitedHealth Group Inc. (NYSE:UNH) said, “Brazil 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. Combining Amil, the clear market leader serving an under-penetrated market of nearly 200 million people, with UnitedHealth Group’s experiences and capabilities, developed over the last three decades are the most compelling growth and value creation opportunity we have seen in years.”

On the other hand, Dr. Bueno said his company’s merger with UnitedHealth Group Inc. (NYSE:UNH) would further strengthen the health care in Brazil, by bringing advanced technology, practical innovation, service initiatives, and clinical programs. According to him, the merger will enable “Amil to grow faster and do more to care for patients, serve consumers as a leading Brazilian company.

UnitedHealth Group Inc. (NYSE:UNH) expects its debt to increase temporarily by 36 percent by the end of 2012.