Amazon and One Medical signed an agreement for Amazon to acquire One Medical

The e-commerce giant takes an even bigger step in healthcare with a $3.49 billion One Medical deal. Amazon (AMZN) on Thursday said it had reached an agreement to acquire primary care provider One Medical for about $3.9 billion in cash.

One Medical is a primary health care service that customers can join and get “virtual care 24 hours a day, 7 days a week”. According to the company’s website, it works in 12 major US markets. It also works with more than 8,000 companies to give their employees One Medical health benefit.

Neil Lindsay, senior vice president of Amazon Health Services, said in a statement Thursday that the company thinks “healthcare is at the top of the list of services that need to be rethought”. Lindsey also said that Amazon hopes to be one of the companies. It will help make healthcare much better in the next few years”.

The acquisition is just the latest example of the tech giant expanding its presence in the healthcare industry. Amazon acquired the online pharmacy PillPack in 2018 and then launched its own digital pharmacy in the US. Separately, Amazon has partnered with JP Morgan Chase and Berkshire Hathaway in an effort to provide better health care. It also provides lower-cost insurance for workers and families at the three companies, and potentially other companies as well. This business called Haven closed last year.

The acquisition of One Medical will be one of the largest in Amazon’s history:

The e-commerce giant has expanded its empire in recent years from online retail to entertainment, and groceries. We expect more, expanding its reach into consumer lives. The acquisition of One Medical will be one of the largest in Amazon’s history. Amazon agreed to buy grocery store chain Whole Foods in 2017 for $13.7 billion. Moreover, earlier this year closed an $8.5 billion deal to buy iconic Hollywood movie studio MGM.

Through the deal with One Medical, Amazon will gain access to physical health clinics and “payer-hospital relationships. This is by Evercore ISI analyst Elizabeth Anderson said in a note Thursday morning.

San Francisco-headquartered One Medical has seen demand for its services rise in recent years amid the Covid-19 pandemic. It has also asked for the growth of the telemedicine sector. In its latest quarterly earnings report, One Medical reported total membership of 767,000, up 28% from last year. One Medical went public in January 2020.

Amazon shares opened relatively unchanged on Thursday:

Shares in 1life Healthcare (ONEM), the parent company of One Medical, surged more than 65% in early trading on Thursday following the announcement. The e-commerce giant’s shares opened relatively unchanged on Thursday. (Shares of CVS Health Corp and Walgreens Boots Alliance fell slightly on Thursday morning after the news.)

The transaction is subject to approval by One Medical’s shareholders and regulators.

While Anderson argued that the antitrust risk is minimal given Amazon’s limited presence in healthcare, some tech industry critics were quick to raise concerns about the deal and the data the company could have accessed.

Frankly, the chilling thought that Amazon has backdoor access to private healthcare data makes us realize how desperately Congress needs to pass antitrust reform to prevent these tech giants from abusing their monopoly power. One Medical, Amazon is looking to acquire a company with high-profile clients such as Airbnb Inc and Google Alphabet Inc, according to its website.

One Medical is a primary care provider that offers both telemedicine services and the ability to meet doctors in person at its 182 offices spread across 25 US markets.

Shares of One Medical traded at $16.95.y group:

The e-commerce giant agreed to pay $18 for each share of One Medical. It represents a 76.8% premium over the medical firm’s closing price on Wednesday. Shares of One Medical traded at $16.95.y group, CNN Business said in a statement.

Amazon Care itself selected Hilton Worldwide Holdings Inc as a key customer in a deal announced last year.

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