Based on this article, UnitedHealth Group Inc. will be making the largest overseas acquisition in the managed care field which is taking over the Brazilian Amil Participacoes SA. UnitedHealth will be purchasing a 90 % of Amil’s shares, worth $ 4.9 billion which is equivalent to 30.75 reais per Amil share. While that, Amil founder and CEO Edson Bueno will in turn buy UnitedHealth shares worth $ 470 million.
Indeed, this acquisition reflects UnitedHealth’s proper calculation of the pros and cons of buying Amil. Identifying the increased competition at country due to Medicaid and Medicare programs, UnitedHealth attenuate its shortcomings by taking advantage of the growing Brazilian middle class who can afford health care and expanding its operations to the country. To make the deal worthy, Amil comes in a package of being an insurance coverage provider and running hospitals and doctor facilities. This gives UnitedHealth an opportunity to test the prospect of a different medical service model in United States. UnitedHealth also expects an increase in 2012 revenues of $ 5 billion and a rise in earnings per share in 2013. This acquisition is a good example of use of SWOT in decision-making process of a company.