Amazon has agreed an all-cash deal to buy US healthcare provider One Medical for $3.9 billion (€3.8 billion) as the ecommerce giant furthers its push into the medical industry.
The company will pay One Medical shareholders $18 per share, a more than 75 per cent premium on its closing price on Wednesday. The San Francisco company’s stock price closed up 69 per cent on Thursday.
The acquisition is the latest attempt by Amazon to become a leading player in the healthcare industry, from becoming an online pharmacy to providing telehealth services. One Medical offers a subscription-based model where users can pay a monthly fee to have access to doctors.
“We think healthcare is high on the list of experiences that need reinvention,” Neil Lindsay, senior vice-president of Amazon Health Services, said in a statement.
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One Medical went public in early 2020 and its share price skyrocketed during the coronavirus pandemic, but it has struggled to keep the momentum, with shares now trading below their initial public offering price. It counts hedge fund Tiger Global and private equity group Carlyle among its largest shareholders.
The deal, which includes debt, is likely to become a test case for US antitrust regulators in the Biden administration who have been openly critical of the monopolistic power of Big Tech.
Lina Khan, chairwoman of the Federal Trade Commission, and Jonathan Kanter, head of antitrust at the US department of justice, have said that it is important to rein in the power exercised in the market by large tech companies such as Amazon and Google.
Amazon launched an online pharmacy in 2020 delivering prescription drugs at discounted prices. Two years earlier, it acquired PillPack, a mail-order pharmacy that packages and delivers tablets by post, for about $1 billion.
At the time of the acquisition of PillPack, stocks of publicly listed pharmacies dropped significantly as a result of Amazon’s entry into the market.
The company is also leveraging its Amazon Web Services cloud and AI services in this area for health so data can be used to spot trends and make predictions around illnesses and treatment.
Amazon faces competition from its Big Tech rival Alphabet, which acquired fitness tracking company Fitbit last year, and London-based AI company DeepMind in 2014, whose health team now sits under Google Health. — Copyright The Financial Times Limited 2022
