A new regulatory document details the behind the scenes negotiations between Amazon and one medical, which led the Seattle technology giant to announce on July 21 that it would buy the primary care company for $3.9 billion.
The document confirms that Amazon is not the only company participating in the bidding for a medical company. According to an anonymous source quoted by Bloomberg news this week, in the documents submitted by 1Life healthcare, a medical parent company, another bidder confirmed as “party a” is CVS health.
According to stat news, the bidding of Amazon and CVs further proves that large companies hope to further expand into the medical technology field.
If the acquisition is approved by regulators, one medical is expected to become the key to Amazon’s broader medical ambitions.
But in this latest behind the scenes story, what really stands out is Amazon’s power move to speed up negotiations and finalize the deal.
According to the detailed negotiation schedule contained in the regulatory documents submitted by 1Life this week, after submitting a medical service offer to the board of directors of 1Life, Amazon “said that it would withdraw if there were any rumors or public speculation about its potential interests in such strategic transactions”.
According to the document, this warning was one of the factors that prompted the board of directors of 1Life to continue to implement Amazon’s offer of $18 per share instead of pursuing a higher price.
According to the document, the board of Directors believes that “additional price negotiations are unlikely to lead Amazon to increase its offer, but may put the transaction at risk”, including the possible disclosure of information to the media, which may lead Amazon to withdraw its offer completely.
Considering what has happened, the possibility of leakage is not a needless worry for Amazon. The following is a description of a series of early events in the document.
Bloomberg reported at that time that 1Life / one medical had “aroused the initial interest of CVS health Corp. and other companies”, and quoted the insider. “Negotiations with CVs are no longer active, but there are other potential suitors weighing the value of the deal,” the report added.
Of course, for different reasons, different participants in any negotiation can use strategic loopholes to seek leverage at different stages of the negotiation. 1Life’s documents did not specify the source of the Bloomberg report.
However, the document does point out that the board of directors of 1Life decided to continue the Amazon acquisition without further negotiation on the price, partly because “after the media reported the rumors of potential strategic transactions involving 1Life on July 5, other potential acquirers lacked contact.”
In the end, Amazon’s strategy worked, excluding its interest in a medical company from the news, speeding up the transaction process, and making the “merger background” part of 1Life’s documents submitted to the SEC a must read content of the company’s M & A.