UnitedHealth to buy DaVita's medical unit for $4.9 billion

[December 06, 2017]  (Reuters) - UnitedHealth Group Inc <UNH.N> said on Wednesday it would buy kidney care services provider DaVita Inc's <DVA.N> medical unit for about $4.9 billion cash, as the health insurer looks to expand operations in outpatient care services.

The logo of Down Jones Industrial Average stock market index listed company UnitedHealthcare is shown in Cypress, California April 13, 2016. REUTERS/Mike Blake/File Photo

The deal will combine UnitedHealth's Optum unit with DaVita's physician network business that serves about 1.7 million patients each year through nearly 300 clinics.

DaVita's medical unit had been a significant drag on the company's financial performance in recent quarters.

The company said it would use the proceeds from the sale for stock buybacks after the deal closes next year, and to repay debt.

DaVita's shares jumped 11.6 percent to $68.01 in premarket trading, while UnitedHealth's shares were slightly lower.

Reuters reported last month that DaVita was exploring a sale of its medical unit.

(Reporting by Divya Grover in Bengaluru; Editing by Arun Koyyur and Sai Sachin Ravikumar)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.