A sign is placed outside One Medical’s office on July 21, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Amazon on Wednesday he said closed its $3.9 billion deal for primary care provider One Medical.
Amazon he agreed last July to acquire One Medical to deepen its presence in healthcare and “dramatically improve” the medical care delivery experience. Amazon has long-term ambitions to expand into the healthcare sector, buying online pharmacy PillPack in 2018 for $750 million, then launching its own virtual clinic for chronic conditions and prescription benefits for Prime members.
The deal gives Amazon access to One Medical’s more than 200 brick-and-mortar practices in 26 markets and roughly 815,000 members.
The purchase was the first major deal announced since CEO Andy Jassy took the helm from founder Jeff Bezos in July 2021and Jassy indicated that he sees health care as a major area of expansion. In a statement, he said healthcare is ripe for disruption, citing long ordering times and the complexity of primary care.
“Customers want and deserve better, and that’s what One Medical has been working on and innovating for more than a decade,” Jassy said in a statement. “Together, we believe we can make healthcare easier, faster, more personal and more convenient for everyone.”
Amazon said it will discount One Medical memberships for US users to $144 from $199 for the first year, regardless of whether they are Prime subscribers.
The shutdown comes after a deadline for the Federal Trade Commission to challenge the deal passed. The acquisition has been undergoing due diligence at the FTC over the past few months. Last September, the agency sent Amazon and One Medical a so-called second request for more information about the deal registration of securities.
While Amazon waited the required amount of time to close the deal, the FTC could still decide to bring a case to terminate the merger at a later date — a right it reserves in any deal it reviews. The FTC, chaired by Lina Khan, has sent out letters to some of the parties seeking the merger, saying that while they can no longer delay the merger because the deadline has passed, they are still investigating and may take legal action later. However, breaking up a merger is often more difficult in a practical sense once the two businesses are formally combined.
“The FTC’s investigation into Amazon’s acquisition of One Medical is ongoing,” said FTC spokesman Douglas Farrar. “The Commission will continue to examine the potential harm to competition caused by this merger, as well as the potential harm to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
The FTC sent a letter to the companies warning that the parties enter into the deal at their own risk and that it still has specific concerns about the deal, an agency official confirmed.
Amazons $8.5 billion deal it also cleared regulatory hurdles for the MGM film studio last March. The company still faces an ongoing investigation by the FTC Main program, as well as its online marketplace. The agency is also reviewing its $1.65 billion purchase of Amazon i robotwhich she announced last year.
Khan is one of Amazon’s biggest critics. She scored her first big hit in antitrust circles with her 2017 Yale Law Journal article, “The Amazon Antitrust ParadoxThe paper, which she wrote while still a law student, argued that the popular consumer welfare antitrust framework was insufficient to judge digital giants like Amazon.
— CNBC Lauren Feiner and Mary Catherine Wellons contributed to this report.
