DaVita Medical Group, a U.S. independent medical group and a subsidiary of DaVita, and Optum, a health services company that is part of UnitedHealth Group, have agreed to merge as of 5 December 2017 for approximately $4.9 billion in cash. The transaction is expected to close in 2018 and is subject to regulatory approval and other customary closing conditions.

DaVita, a Fortune 500 company, is the parent company of DaVita Kidney Care and DaVita Medical Group. Optum is an information and technology-enabled health services business dedicated to helping deliver intelligent, integrated solutions that help to modernize the health system and improve overall population health.

DaVita will join with Optum’s physician-led primary, specialty, in-home, urgent- and surgery-care delivery services business. The merger will improve care quality, cost, and patient satisfaction through integrated ambulatory care delivery systems enabled by information technology and supportive clinical services. Optum’s data, analytics, technologies and clinical expertise will help DaVita Medical Group physicians deliver even higher quality care more effectively to the patients they serve.

DaVita Medical Group serves approximately 1.7 million patients per year through nearly 300 medical clinics featuring primary and specialist care. With medical groups in California, Colorado, Florida, Nevada, New Mexico and Washington, DaVita Medical Group will expand the market reach of Optum’s strategic care delivery portfolio, including Surgical Care Affiliates, MedExpress and HouseCalls. DaVita Medical Group also operates 35 urgent-care centers and six outpatient surgery centers.

Following the transaction, DaVita Medical Group will become part of Optum’s OptumCare division, which today works with more than 80 health plans to serve millions of consumers annually through 30,000 affiliated physicians and hundreds of care facilities. Joe Mello, Chief Operating officer of DaVita Medical Group, will continue in a leadership role.

DaVita plans to use the proceeds from the transaction for significant stock repurchases over the one to two years following the closing of the transaction, as well as to repay debt and for general corporate purposes.