UnitedHealth considered multiple bids to exit the region, as the insurer has faced a series of financial and operational setbacks.
UnitedHealth Group has finalised the sale of its remaining South American company, Banmedica, to Brazilian private equity company Patria Investment for around $1 billion, according to sources who have knowledge of the matter.
The deal was finalised on Saturday, and a formal announcement is expected at the start of next week. This move successfully makes them withdraw from the Latin American market, which they have been trying to do since 2022. UnitedHealth had already divested its business in both Brazil and Peru before this deal.
The plan to sell Banmedica, which operates in Colombia and Chile, has been under discussion for almost a year. UnitedHealth is considering multiple bids to exit the region, as the insurer has faced a series of financial and operational setbacks, including a reported loss of more than $8 billion in Latin America and a reported criminal accounting investigation.
The largest US health insurer has increased urgency to sell Banmedica over recent months as the company faced multiple challenges. Firstly, the new CEO, Steve Hemsley, stated that he will try to earn back the company’s trust after a report stated that the company is under investigation for Medicare fraud. Secondly, there is an unexpected increase in medical costs and the tragic murder of Brian Thompson, the head of its insurance unit.
The change of leadership at UnitedHealth has added another layer of complexity to the company’s recent history. Steve Hemsley, who previously served as CEO from 2006 to 2017, returned to the role in May after Andrew Witty resigned as chief executive. Witty had taken over in 2021, but the company had missed its first earnings target in over a decade, and a series of high-profile incidents prompted management to change the roles. Hemsley has emphasized the need to acknowledge the difficult period the company is facing.
During a recent call with analysts and investors, Hemsley discussed his plans and strategy to lead UnitedHealth on a path of recovery and growth. He stated that the company expects to resume growth in 2026 and will pick up speed in 2027. The health insurer increased its annual profit forecast in October and plans to provide more detailed 2026 projections in January. Despite this optimistic outlook, the company’s stock price has been relatively stable, which shows lingering concerns among investors.
Executives at UnitedHealth have also addressed the challenges facing the company’s Medicaid business, which serves lower-income Americans. They noted that aligning payment rates with the rising costs of medical services is expected to remain difficult throughout the coming year. The Medicaid segment’s recovery is viewed as a more complex undertaking compared to other areas of the business.
The sale of Banmedica is expected to reduce distractions and allow UnitedHealth to focus more effectively on its core operations and turnaround initiatives under Hemsley’s leadership. Banmedica itself had a substantial presence in the region, with 1.7 million health insurance members, seven hospitals, and 47 medical centers as of June, after its earlier divestment from Peru.
UnitedHealth’s exit from South America contributed to significant losses, with last year’s financial results reflecting an $8.3 billion write-down tied to its operations in the region. The bulk of this loss, $7.1 billion, was associated with the sale of its Brazilian business, while $1.2 billion stemmed from Banmedica.
Neither Patria Investments nor UnitedHealth responded to requests for comment when the news broke. The sale of Banmedica not only completes UnitedHealth’s withdrawal from Latin America but also signals a renewed focus on its US operations and long-term growth strategy. As the company works to rebuild trust and stabilize its business after a challenging period, the divestment is seen as a pivotal step in its ongoing turnaround efforts.