Marketdash
Back to News

UnitedHealth Closes the Book on South America With $1 Billion Banmedica Exit

MarketDash Editorial Team
7 days ago
UnitedHealth is selling its last South American asset, Banmedica, to Patria Investments for $1 billion, wrapping up a costly retreat from Latin America that has cost the healthcare giant over $8 billion in losses.

UnitedHealth Group (UNH) is officially done with South America. The healthcare giant has reached a $1 billion deal to sell Banmedica, its last remaining operation on the continent, to Brazilian private equity firm Patria Investments. The agreement was reportedly signed Saturday, with a formal announcement expected Monday.

This isn't exactly a victory lap. UnitedHealth has been methodically unwinding its Latin American ambitions since 2022, and the retreat has been expensive. The company recorded an eye-watering $8.3 billion loss tied to its South American operations—$7.1 billion from Brazil and $1.2 billion from Banmedica alone.

What UnitedHealth Is Selling

Banmedica, which UnitedHealth co-owned for years, operates health insurance and medical facilities across Chile and Colombia. As of June, the business covered 1.7 million health plan members and managed a network of seven hospitals and 47 medical centers. Not tiny, but clearly not worth the headache anymore.

The company originally acquired Banmedica back in 2018 as part of an ambitious plan to expand across South America. Then-CEO David Wichmann talked about it as a foundation for decades of growth. Instead, financial challenges forced the company to pull the plug and reverse course entirely.

A Long Goodbye

According to sources familiar with the negotiations, talks surrounding the Banmedica sale have been dragging on for nearly a year as UnitedHealth navigated valuation expectations and regulatory complexities across multiple jurisdictions. The company previously exited Brazil in late 2023 and Peru earlier this year, making this the final chapter in a costly Latin American experiment.

One Less Distraction for Hemsley

The transaction eliminates another problem for Stephen Hemsley, who returned to the CEO role in May after previously running the company from 2006 to 2017. His comeback wasn't exactly planned—he stepped back in following a brutal stretch that included the murder of a senior executive, escalating medical costs, and renewed scrutiny from federal investigators. Streamlining operations and getting rid of underperforming assets is central to his turnaround strategy.

And About That UK Business

Interestingly, UnitedHealth's exit strategy isn't limited to South America. In October, reports emerged that the UK division of UnitedHealth's Optum unit is attracting private equity interest just two years after acquisition. Optum operates EMIS, the electronic patient record system used by most British general practitioners. Sources told Sky News that Blackstone Inc. (BX) is among the potential bidders exploring a purchase of Optum's UK business.

It seems like UnitedHealth is taking a hard look at its international portfolio and deciding what's worth keeping. Sometimes the best growth strategy is knowing when to cut your losses.

Price Action: UNH stock was down 0.66% at $327.61 during Monday's premarket session.

Back to News

UnitedHealth Closes the Book on South America With $1 Billion Banmedica Exit

MarketDash Editorial Team
7 days ago
UnitedHealth is selling its last South American asset, Banmedica, to Patria Investments for $1 billion, wrapping up a costly retreat from Latin America that has cost the healthcare giant over $8 billion in losses.

UnitedHealth Group (UNH) is officially done with South America. The healthcare giant has reached a $1 billion deal to sell Banmedica, its last remaining operation on the continent, to Brazilian private equity firm Patria Investments. The agreement was reportedly signed Saturday, with a formal announcement expected Monday.

This isn't exactly a victory lap. UnitedHealth has been methodically unwinding its Latin American ambitions since 2022, and the retreat has been expensive. The company recorded an eye-watering $8.3 billion loss tied to its South American operations—$7.1 billion from Brazil and $1.2 billion from Banmedica alone.

What UnitedHealth Is Selling

Banmedica, which UnitedHealth co-owned for years, operates health insurance and medical facilities across Chile and Colombia. As of June, the business covered 1.7 million health plan members and managed a network of seven hospitals and 47 medical centers. Not tiny, but clearly not worth the headache anymore.

The company originally acquired Banmedica back in 2018 as part of an ambitious plan to expand across South America. Then-CEO David Wichmann talked about it as a foundation for decades of growth. Instead, financial challenges forced the company to pull the plug and reverse course entirely.

A Long Goodbye

According to sources familiar with the negotiations, talks surrounding the Banmedica sale have been dragging on for nearly a year as UnitedHealth navigated valuation expectations and regulatory complexities across multiple jurisdictions. The company previously exited Brazil in late 2023 and Peru earlier this year, making this the final chapter in a costly Latin American experiment.

One Less Distraction for Hemsley

The transaction eliminates another problem for Stephen Hemsley, who returned to the CEO role in May after previously running the company from 2006 to 2017. His comeback wasn't exactly planned—he stepped back in following a brutal stretch that included the murder of a senior executive, escalating medical costs, and renewed scrutiny from federal investigators. Streamlining operations and getting rid of underperforming assets is central to his turnaround strategy.

And About That UK Business

Interestingly, UnitedHealth's exit strategy isn't limited to South America. In October, reports emerged that the UK division of UnitedHealth's Optum unit is attracting private equity interest just two years after acquisition. Optum operates EMIS, the electronic patient record system used by most British general practitioners. Sources told Sky News that Blackstone Inc. (BX) is among the potential bidders exploring a purchase of Optum's UK business.

It seems like UnitedHealth is taking a hard look at its international portfolio and deciding what's worth keeping. Sometimes the best growth strategy is knowing when to cut your losses.

Price Action: UNH stock was down 0.66% at $327.61 during Monday's premarket session.