UnitedHealth Eyes Retreat From Latin America After $8.3 Billion Loss

UnitedHealth Group Inc (NYSE:UNH) is reportedly weighing multiple offers for its Latin American business as it scrambles to recover from a string of corporate stumbles, including a leadership shakeup and a reported federal investigation.

The potential sale, involving its Banmedica unit, comes as the company seeks to restore shareholder confidence and streamline operations under new leadership.

In May, UnitedHealth's CEO, Andrew Witty, resigned for personal reasons. Stephen Hemsley, who previously held the CEO title from 2006 to 2017, succeeded him. The company also suspended its 2025 outlook.

Also Read: UnitedHealth Hits 2008-Era Oversold Levels As Citadel Advisors Sells, Fisher Buys

In an SEC filing on Wednesday, UnitedHealth said it canceled the performance-based restricted stock units granted to Witty,

Year to date, UnitedHealth's stock has plunged almost 40%, with the majority coming after the disappointing fourth-quarter 2024 earnings.

After reporting weaker-than-expected earnings and facing allegations of Medicare fraud—currently not formally acknowledged by the Department of Justice—UnitedHealth is shifting its focus.

Reuters notes that the insurance giant has been working to exit Latin America since 2022, but recent developments have heightened the urgency of its plans.

UnitedHealth's aggressive growth strategy under Witty exposed the healthcare giant to mounting regulatory scrutiny, soaring costs, and a shifting Medicare landscape.

Hemsley is stepping forward to acknowledge the fallout and chart a new course, promising a comprehensive review of some of the company's most controversial practices.

Citing individuals familiar with the matter, Reuters reported UnitedHealth had received four non-binding bids for Banmedica, which operates in Colombia and Chile. The bids reportedly value the business at approximately $1 billion.

Interested parties include Acon Investments, Patria Investments, Christus Health, and Auna, with the latter exploring a financial partnership to support its offer.

The company aims to set a July deadline for binding proposals for Banmedica, which generates more than $200 million in annual EBITDA.

Banmedica was acquired in 2018 as part of UnitedHealth's plan to expand across South America. Then, CEO David Wichmann touted the deal as a foundation for growth for decades. However, financial challenges led the company to reverse.

UnitedHealth previously exited Brazil in late 2023 and Peru earlier this year.

UnitedHealth recorded an $8.3 billion loss tied to its South American operations—$7.1 billion from Brazil and $1.2 billion from Banmedica.

Though Banmedica remains profitable, with over 2.1 million insurance members and about 4 million patient visits annually across its 13 hospitals and 143 medical centers, UnitedHealth now views it as too small to align with its long-term strategic goals.

Price Action: UNH stock is down 0.51% at $301.67 at the last check on Monday

Read Next:

• Humana Backs Reforms To Limit Medicare Advantage Billing Practices

Photo by Ken Wolter via Shutterstock