On July 21, 2022 in San Rafael, California, a sign is in front of a One Medical office.
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Amazon said Wednesday it has closed the $3.9 billion deal for primary care provider One Medical.
Amazon agreed to acquire One Medical last July to deepen its healthcare presence and “drastically improve” the experience of getting medical care. Amazon has long had ambitions to expand into healthcare, acquiring online pharmacy PillPack for $750 million in 2018, then launching its own virtual clinic for chronic conditions, and prescription perks for Prime members.
The deal gives Amazon access to One Medical’s more than 200 brick-and-mortar medical offices in 26 markets and approximately 815,000 members.
The purchase was the first major deal announced since CEO Andy Jassy took over from founder Jeff Bezos in July 2021, and Jassy has indicated he sees healthcare as an important area of expansion. In a statement, he said the healthcare industry is ripe for disruption, citing long appointment 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 would reduce One Medical memberships for US users to $144 from $199 for the first year, whether or not they’re a Prime subscriber.
The closing comes after a deadline has passed for the Federal Trade Commission to challenge the deal. The acquisition has been thoroughly investigated by the FTC in recent months. Last September, the agency sent Amazon and One Medical a so-called second request for more information about the deal, according to the securities filings.
While Amazon waited the required period of time to close the deal, the FTC could still decide to file a case to reverse the merger at a later date — a right it reserves with any deal it reviews. The FTC under Chair Lina Khan has sent letters to a number of parties seeking to merge, saying that while they can no longer delay the merger because the deadline has passed, they are still investigating and may pursue legal action at a later date. However, aborting a merger is often more difficult in a practical sense when two companies have formally merged.
“The FTC’s investigation into Amazon’s acquisition of One Medical continues,” FTC spokesman Douglas Farrar said. “The committee will continue to look at potential harm to competition created by this merger, as well as potential harm to consumers that may arise from Amazon’s monitoring and use of sensitive health information from One Medical.”
The FTC sent a letter to the companies warning them that the parties are closing the deal at their own risk and that they still have specific concerns about the deal, an agency official confirmed.
Amazon’s $8.5 billion deal for movie studio MGM last March also cleared regulatory hurdles. The company continues to face an ongoing investigation by the FTC into its Prime program and its online marketplace. The agency is also reviewing Amazon’s $1.65 billion purchase of iRobot, which it announced last year.
Khan is one of Amazon’s biggest critics. She made her first big splash in antitrust circles with her 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox.” In the article, written while still a law student, she argued that the popular antitrust framework focused on consumer welfare was inadequate to judge digital giants like Amazon.
— CNBCs Lauren Feiner And Mary Catherine Wellons contributed to this report.