UnitedHealth to buy DaVita's medical unit for US$4.9 bil

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DaVita's largest business is kidney care, through the 2,470 outpatient dialysis centers that it runs or provides administrative services to across the US, serving more than 200,000 patients a year.

The deal will hopefully cut costs and improve care, given the proximity and number of care centers-especially for people with non-life threatening, chronic conditions.

The deal will combine UnitedHealth's Optum unit with DaVita's physician network business that serves about 1.7 million patients each year through almost 300 clinics. DaVita's kidney dialysis unit is not included in the deal. Optum also last month took over the health unit of Advisory Board Co., which advises hospital systems.

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EvercoreISI analyst Michael Newshal said he thought near-term earnings additions would be close to neutral given the price that UnitedHealth was paying was on the high side. Its shares gained less than 1 percent to $220.48 on Wednesday, lifting its market capitalization to more than $212 billion.

DaVita Medical Group includes around 280 clinics offering primary and specialist care, as well as 35 urgent-care centers and six outpatient surgery centers.

Earlier this year, Optum closed its $2.3 billion acquisition of Surgical Care Affiliates Inc., a major surgical company.

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UnitedHealth has said Optum aims to provide primary care and ambulatory services in 75 markets, representing about two-thirds of the USA population.

DaVita plans to use the proceeds of the sale for stock buybacks and to repay debt.

DaVita's medical group had $4.11 billion in sales previous year, or 30 percent of the total.

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"I am so proud of the DaVita Medical Group accomplishments, including our excellent clinical outcomes as reflected in our star ratings performance, our strong emphasis on growing physician leaders, our teammate engagement, and advancing the care model", Thiry said.

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