For Immediate Release
UNITEDHEALTH GROUP, AMIL TO COMBINE
? Leaders in U.S. and Brazilian markets join to form the largest, most diversified health care company serving The Americas
? Combined clinical, technology and operating capabilities establishes a distinctive growth platform to serve the needs of well-positioned, expanding economies
? Growth diversification alongside UnitedHealth Group's market leading
UnitedHealthcare and Optum businesses? Sustains and strengthens Amil's growth and potential in Brazil and in serving emerging markets going forward
Minnetonka, MN and Rio de Janeiro, Brazil (October 8, 2012) -
UnitedHealth Group (NYSE: UNH) and Amil Participações S.A.
(BM&FBOVESPA: AMIL3) announced today that the companies have
agreed to merge, bringing together two leading organizations
with the broad scale, distinctive resources and advanced
technology to help modernize the performance of the health
systems and serve the health care needs of consumers in their
markets in the Americas.
Amil is Brazil's largest health care company, providing
health and dental benefits, hospital and clinical services,
and advanced care management resources to more than
5 million people. Outside the United States, Brazil is the
largest and fastest growing private health care market in the
Americas.
UnitedHealth Group is the largest health benefits and
services company in the United
States and a leader in innovative approaches to improving
consumer health and advancing the health care system.
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"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," said Stephen J. Hemsley, president and CEO of
UnitedHealth Group. "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 is the
most compelling growth and value creation opportunity we have
seen in years."
Dr. Edson Bueno, founder and chief executive officer of Amil,
said, "Our union with UnitedHealth Group will enable us to
bring advanced technology, a tradition of practical
innovation, service initiatives and clinical programs to
further strengthen health care in Brazil, and enable Amil to
grow faster and do more to care for patients and serve
consumers as a leading Brazilian company."
Supported by an economy with average GDP per capita growing
at a compound annual rate of 19.4 percent since 2003, and a
GDP per capita almost 2.5 times that of China, demand for
private health care coverage continues to rise in Brazil.
Private health benefit membership rose from 35 million people
in 2005 to nearly 48 million in 2011, but still serves only
about 25 percent of the population, compared with nearly 80
percent penetration in the U.S.
Amil uniquely in Brazil offers a full range of health
benefits products across an array of price points, as well as
robust dental benefits. Amil's 2012 annualized revenues, in
the range of $5 billion, represents an increase of 15 percent
over 2011. The company's market position has been built
through a focus on innovative products, responsive service,
strong brands, and affordable access to private health care
delivery resources.
Amil operates a distinctive care delivery model, which
efficiently integrates health benefits with care services on
a selective basis. Its owned delivery network includes 22
hospitals and nearly 50 clinics, plus a number of leading
specialty and preventive care outpatient clinics and
emergency care centers. Amil maintains the largest care
network serving Brazil, including 44,000 doctors, 3,300
hospitals, nearly 11,000 outpatient clinics and 12,000
ancillary service facilities. The combination of
patient-focused disease management programs, effective
alignment with and direction of patients to clinical centers
of excellence for complex procedures, and the performance of
its integrated
network have consistently produced superior clinical outcomes
and cost performance.
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UnitedHealth Group intends to acquire 90 percent of the 359
million outstanding common shares of Amil for approximately
$4.9 billion in cash. This includes realizable Brazilian tax
benefits worth an estimated present value of $600 million,
bringing the effective equity purchase price to approximately
$4.3 billion.
The purchase will be completed in two steps. Upon Brazilian
regulatory approval, expected in the fourth quarter of 2012,
UnitedHealth Group will purchase approximately
60 percent of the outstanding shares from controlling
shareholders and management and, in the first half of 2013,
will advance a tender offer to purchase approximately 30
percent from public shareholders. Amil's founder, Dr. Bueno,
and his partner, Dr. Dulce Pugliese, currently control
approximately 70 percent of the shares and will retain the
remaining 10 percent for at least five years. Amil's CEO has
further committed to investing approximately $470 million in
UnitedHealth Group shares and holding those shares for the
same five year term.
The combination is expected to be slightly accretive to
UnitedHealth Group's earnings per share in 2013. UnitedHealth
Group expects its debt to total capital ratio to rise
temporarily to approximately 36 percent at the end of the
year, but return to below 35 percent by the end of the second
quarter of 2013. UnitedHealth Group remains committed to the
forward development of its dividend policy. Its share
repurchase program will continue, paced to accommodate
acquisition funding and capital ratio objectives.
Amil's founder, Dr. Edson Bueno, will continue to lead the
company as chairman and CEO, and the experienced Amil
leadership team will continue in their current positions. In
addition, Dr. Bueno will bring his experience and knowledge
of international health care and integrated care systems as a
new member of UnitedHealth Group's board of directors upon
the transaction's close.
Richard Burke, chairman of the UnitedHealth Group board of
directors said, "A highly trained and experienced physician
and talented entrepreneur with deep expertise across the
continuum of care, Dr. Bueno will be a strong addition to our
board of directors. He is highly respected throughout Brazil,
Latin America and in global health
care circles."
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UnitedHealth Group net earnings for the third quarter 2012
are expected to be a least
$1.45 per share, with medical enrollment growth of over
650,000 people in the quarter and Optum clearly on its growth
pace for the quarter and year. Medical costs remained well
managed again this quarter. A full update on UnitedHealth
Group's third quarter earnings and expectations for the
remainder of 2012 will be provided on its third quarter
earnings call scheduled for October 16.
A presentation summarizing the Brazilian market and Amil's
position and results is available on the Investors page of
UnitedHealth Group's website at
www.unitedhealthgroup.com
Senior members of UnitedHealth Group and Amil's management
teams will discuss the new partnership with analysts and
investors in a public conference call on October 8,
2012 at 8:45 a.m., Eastern Daylight Time. UnitedHealth Group
will have an audio webcast from, and will post a copy of
management's remarks on the Investors page of its website at
www.unitedhealthgroup.com.
Investors can access the call at 866-952-1907 (domestic) and
785-424-1826 (international), passcode UNH1008. The Company
recommends calling approximately
10-15 minutes before the start of the call. A replay of the
call will be available for seven days and can be accessed at
800-677-6124 (domestic) and 402-220-0664 (international).
Amil Participações S.A. is the largest healthcare
organization in Brazil, according to the Brazilian managed
care regulator (ANS), currently assisting more than 5 million
people in the states of São Paulo, Rio de Janeiro, Paraná,
Minas Gerais, Pernambuco, Bahia, Rio Grande do Norte and the
Distrito Federal. The Company has the largest provider
network in the country, including 44,000 physicians; 3,300
hospitals; 11,000 outpatient facilities; and 12,000
laboratories and diagnostic imaging centers. Amil also owns
one of the largest private hospital networks in Brazil, with
22 hospitals and 2 others under construction. Amil, which
began its activities in 1978, offers a wide range of
healthcare and dental plans for small, medium and large
companies, as well as plans for individuals from all income
segments, offering its members access to carefully
selected
healthcare service providers.
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UnitedHealth Group (NYSE: UNH) is a diversified health and
well-being company dedicated to helping people live healthier
lives and making health care work better. With headquarters
in Minnetonka, Minnesota, UnitedHealth Group offers a broad
spectrum of products and services through two business
platforms: UnitedHealthcare, which
provides health care coverage and benefits services; and
Optum, which provides information and technology-enabled
health services. Through its businesses, UnitedHealth Group
serves more than 75 million people worldwide. For more
information, visit UnitedHealth Group at www.unitedhealthgroup.com.
UnitedHealth Group
Investors: John Penshorn (952) 936-7214
Media: Don Nathan (952) 936-1885
Amil
Investors: Erwin Kleuser +55 (21) 3805-1155
Media: Euro Comunicação (21) 3204-3204 and CDN Comunicação
(11) 4084-4800
This press release may contain statements, estimates,
projections, guidance or outlook that constitute
"forward-looking" statements as defined under U.S. federal
securities laws. Generally the words "believe," "expect,"
"intend," "estimate," "anticipate," "plan," "project,"
"should" and similar expressions identify forward-looking
statements, which generally are not historical in nature.
These statements may contain information about financial
prospects, economic conditions and trends and involve risks
and uncertainties. We caution that actual results could
differ materially from those that management expects,
depending on the outcome of certain factors, including
potential failure to account for all material revenues,
income, costs and expenses that may affect our estimated
earnings per share result for the third quarter of 2012;
failure to complete or receive anticipated benefits of the
Amil acquisition; our ability to generate sufficient funds to
maintain our quarterly dividend payment cycle or to continue
repurchasing
shares of our common stock; and foreign currency translation
fluctuations and changes
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in capitai markets conditions, our capitai requirements or our estimated results of operations that may result in debt to capitai ratio that is lower or higher than we anticipated.
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