Amazon to buy One Medical for $3.9 billion as it expands into healthcare

One Medical is a membership-based primary health care service that promises customers “24/7 access to virtual care.” The company operates in a dozen major US markets, according to its website, and partners with more than 8,000 companies to offer One Medical benefits to its employees.

In a statement Thursday announcing the acquisition, Neil Lindsay, senior vice president of Amazon Health Services, said the e-commerce giant believes “healthcare is high on the list of services that need to be rethought.” Lindsey added that Amazon hopes to be one of the companies “that will help significantly improve the quality of healthcare over the next few years.”

The acquisition is just the latest example of the tech giant expanding its presence in the healthcare industry. Amazon bought pills, an online pharmacy, in 2018 and then launched its own digital pharmacy in the US. Separately, Amazon is partnering with JP Morgan Chase and Berkshire Hathaway to bring better health care and lower cost insurance to workers and families at the three companies, and potentially other companies as well. This business called Haven closed last year.

Amazon has expanded its empire in recent years from online commerce to entertainment, grocery, and more, expanding its reach into consumer lives. The company’s rapid expansion has also raised concerns among antitrust authorities.

The acquisition of One Medical will be one of the largest in Amazon’s history. Amazon agreed to buy grocery store chain Whole Foods in 2017 for $13.7 billion, and earlier this year closed an $8.5 billion deal to buy iconic Hollywood movie studio MGM.

San Francisco-headquartered One Medical has experienced a surge in demand for its services in recent years amid the Covid-19 pandemic and the growth of the telemedicine sector. In his latest quarterly income statementOne Medical said it has a total membership of 767,000, up 28% from last year. One Medical went public in January 2020.
Promotions for 1life Healthcare (ABOUT HIM), the parent company of One Medical, rose more than 65% in early trading on Thursday after the announcement. Amazon shares opened relatively unchanged on Thursday. (Shares of CVS Health Corp and Walgreens Boots Alliance fell slightly on Thursday morning after the news.)

The transaction is subject to approval by One Medical’s shareholders and regulators.

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