UnitedHealth Group is in talks to sell its Latin American operations in a deal that could be worth around $1 billion. Sources say this potential sale is part of the insurer’s plan to focus on the U.S. market. The biggest part of the possible sale is Banmedica, a healthcare provider that operates in several countries in the region.
Four groups from the U.S. and Latin America have expressed interest in buying Banmedica. A deal could be reached as soon as this summer. The choice to leave the Latin American market comes during a difficult time for UnitedHealth.
Shares have dropped 40% this year amid a complex crisis. Failed expansion plans and economic challenges in the region have led the company to rethink its foreign investments. For years, UnitedHealth tried to enter the Latin American healthcare market but faced many obstacles.
These included economic instability and regulatory difficulties in various countries. This strategic refocus on the U.S. core market is expected to simplify UnitedHealth’s operations. It could also potentially stabilize its financial performance in the long run.
UnitedHealth has been trying to sell its Latin American businesses since 2022.
UnitedHealth refocuses on U.S. market
The company’s urgency to sell its subsidiary Banmedica has increased recently due to growing financial pressures.
UnitedHealth has already left its operations in Brazil and Peru. It is now working on selling its remaining assets in Colombia and Chile. Currently, four non-binding bids have been received for Banmedica, estimated to be worth around $1 billion.
The interested parties include Acon Investments, Patria Investments, Christus Health, and Auna from Lima. Auna is reportedly working with a financial partner to strengthen its bid. UnitedHealth bought Banmedica in 2018 under then-CEO David Wichmann, who had envisioned long-term growth in South America.
However, the insurer decided to withdraw from the region three years later, mainly due to losses from its Brazilian subsidiary, Amil. Despite Banmedica remaining profitable, with earnings before interest, taxes, depreciation, and amortization (EBITDA) exceeding $200 million, the operation has been deemed too small to align with UnitedHealth’s broader interests. Brazilian investment bank BTG Pactual is advising UnitedHealth on the sale process.
The company expects to set a deadline for binding proposals for Banmedica by July as it seeks to streamline its operations and pivot to more profitable markets. In the first quarter of 2025, UnitedHealth reported net earnings of $6.4 billion, a significant improvement compared to a net loss of $1.2 billion in the same period a year earlier. Stephen Hemsley took over as CEO from Andrew Witty in May.
