Amazon closes deal to buy primary care provider One Medical

Amazon on Wednesday mentioned it had closed its $3.9 billion deal for main care supplier One Medical.

Amazon agreed final July to accumulate One Medical to deepen its presence in well being care, and “dramatically improve” the expertise of getting medical care. Amazon has lengthy had ambitions to increase into well being care, shopping for on-line pharmacy PillPack in 2018 for $750 million, then launching its personal digital clinic for power circumstances, and prescription perks for Prime members.

The deal offers Amazon entry to One Medical’s greater than 200 brick-and-mortar medical places of work in 26 markets, and roughly 815,000 members.

The buy was the primary main deal introduced since CEO Andy Jassy took the helm from founder Jeff Bezos in July 2021, and Jassy has indicated he sees well being care as a significant space of growth. In an announcement, he mentioned well being care is ripe for disruption, citing lengthy appointment occasions and the complexities of main care.

“Customers want and deserve better, and that’s what One Medical has been working and innovating on for more than a decade,” Jassy mentioned in an announcement. “Together, we believe we can make the health care experience easier, faster, more personal, and more convenient for everyone.”

Amazon mentioned it might low cost One Medical memberships for U.S. customers to $144 from $199 for the primary yr, no matter whether or not they’re a Prime subscriber.

The closing comes after a deadline handed for the Federal Trade Commission to problem the deal. The acquisition had been present process an in-depth overview on the FTC for the previous a number of months. Last September, the company despatched Amazon and One Medical a so-called second request for extra details about the deal, in accordance with securities filings.

While Amazon waited out the required interval to shut the deal, the FTC might nonetheless determine to convey a case to unwind the merger at a later level — a proper it reserves in any deal it critiques. The FTC beneath Chair Lina Khan has despatched out letters to some events looking for to merge saying that whereas they can not maintain up the merger any longer as a result of the deadline has handed, they’re nonetheless investigating and will take authorized motion at a later date. Still, breaking apart a merger is commonly tougher in a sensible sense as soon as two companies are formally mixed.

“The FTC’s investigation of Amazon’s acquisition of One Medical continues,” mentioned FTC spokesman Douglas Farrar. “The commission will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”

The FTC despatched a letter to the businesses warning them that the events are closing the deal at their very own danger, and that it nonetheless has particular issues concerning the deal, an company official confirmed.

Amazon’s $8.5 billion deal for film studio MGM additionally cleared regulatory hurdles final March. The firm nonetheless faces an ongoing probe by the FTC into its Prime program, in addition to its on-line market. The company can also be reviewing Amazon’s $1.65 billion buy of iRobot, which it introduced final yr.

Khan is one in every of Amazon’s greatest critics. She made her first huge splash in antitrust circles together with her 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox.” The article, which she wrote whereas nonetheless a legislation scholar, argued that the favored antitrust framework centered on client welfare, was insufficient to evaluate digital giants like Amazon.

— CNBC’s Lauren Feiner and Mary Catherine Wellons contributed to this report.