International Yard Sale: UnitedHealth to Say Adiós to Latin American Subsidiary

UnitedHealth Group, the behemoth health insurer that has steadily transformed itself into a global health care conglomerate, is now looking to offload part of that empire to appease shareholders.

UnitedHealth Group is weighing bids to sell its money-losing Latin American division, Banmédica, for roughly $1 billion — an exit that reflects the company’s mounting troubles at home. According to GuruFocus, Banmédica, a UnitedHealth Group subsidiary that operates in Latin America, has racked up more than $8 billion in losses, prompting the insurer to put the business up for sale. 

Four offers are reportedly under review, including bids from private equity firms Acon Investments and Patria Investments, nonprofit Christus Health, and Peru-based Auna. UnitedHealth first began exploring a sale in 2022, but the process has taken on new urgency after the company’s stock plummeted 40% this year amid soaring medical costs, a federal investigation, and leadership upheaval.

Over the last 20 years, UnitedHealth has pursued an aggressive vertical integration strategy — buying up physician groups, clinics, and hospital systems — not only in the U.S. but also in markets like Latin America, where Banmédica served as a gateway into direct care delivery. That strategy mirrors the company’s expansion stateside through its Optum subsidiary, where it now employs tens of thousands of doctors. 

The move comes just weeks after longtime executive Stephen J. Hemsley returned as CEO, pledging to “rebuild trust” and stabilize the company following the abrupt resignation of Andrew Witty. UnitedHealth also faces a Department of Justice probe into its lucrative Medicare Advantage business—an investigation that triggered an 18% single-day drop in its share price.

One recent report said executive meetings with Hemsley these days are like colonoscopies. You can be sure he has ordered his team to justify every component of the sprawling company. Expect those that aren’t contributing to earnings to be put up for sale. 

Selling off Banmédica won’t erase UnitedHealth’s growing dominance in U.S. health care (where, at least until recently, the company was continuing to vertically integrate at a furious pace.) But ditching Banmédica reportedly will allow the company to shed a troubled asset and redirect capital to lock in on its core domestic operations–and try to appease Wall Street analysts and investors.