UnitedHealth Group Inc. plans to buy Brazil's largest health care company for an estimated $4.9 billion, giving the company a commanding position for growth in Latin America.

The Minnetonka-based insurance giant said Monday that it will acquire a 90 percent stake of Amil Participacoes, the top health insurer and hospital operator in Brazil, where a rising middle class is creating demand for more health care services and private insurance.

"This is a potentially transformative move for United, where they're establishing a significant operation in an emerging market," said Thrivent Financial's senior health care analyst, David Heupel. "You don't find growth markets with anything close to what Brazil can offer."

Brazil's economy has more than tripled in size since 2005. But only about 25 percent of middle- and upper-income Brazilians have insurance, said Amil's CEO and founder, Dr. Edson Bueno.

Based in Rio de Janeiro, Amil is a publicly traded, $5 billion company that provides health and dental benefits, and hospital and clinical services for about 5 million people. Founded in 1978, it has 22 hospitals and nearly 50 clinics, one of the largest networks in South America.

UnitedHealth, the largest managed-care company in the United States by membership and revenue, has been making forays into the global market in recent years, but the Amil acquisition marks a significant push.

It is United's second-largest purchase since PacifiCare Health Systems in 2005, a $9.2 billion deal that put UnitedHealthcare's membership rolls on par with WellPoint Inc., at the time the nation's largest insurer.

The Amil "transaction effectively puts a stake in the ground and signals their desire to grow outside the U.S.," said Jeffries analyst David Windley, who said in a research note that the deal will represent about 4 percent of United's consolidated revenue.

UnitedHealth Group CEO Stephen Hemsley said United had been "quietly evaluating" the Brazilian managed-care market for a number of years, and had been engaged with Amil for more than two years. He sees a potential market of nearly 200 million people in Brazil.

"If you think about it, we will be arguably the market leader in the United States and Brazil and Latin America," Hemsley said, adding that pairing the U.S. and Brazilian operations gives United "the two best assets" in the world's "best-performing, most consistent growth markets for health care."

United has made at least 17 acquisitions since the start of 2010, at least three of them outside the United States. The moves have expanded the international presence of both its insurance division, UnitedHealthcare, and its Optum health care services arm.

The company has announced deals in Australia and the Middle East and has taken a larger managed-care role in the United Kingdom through Britain's nationalized health plan. It is also doing business in China and India and across Europe and Scandinavia.

The acquisition sets UnitedHealth as one of the most diversified companies in managed care, Heupel said. Even though Aetna, WellPoint and others have an international presence, "it's not nearly to the extent of what United is doing."

It also puts UnitedHealth into a market where it can both offer insurance and run the hospitals and clinics -- an integrated system that advocates say can lower costs. Doctors and other providers, particularly in the United States, have not always welcomed such partnerships with insurance companies, which are often seen as gatekeepers.

But the trend is happening more in the United States, and even in the Twin Cities, where private insurer HealthPartners and Park Nicollet Health Services have announced plans to merge.

Under terms of the deal with United, Bueno will continue to lead Amil as chairman and CEO and will join UnitedHealth's board. Bueno and his business partner and ex-wife, Dr. Dulce Pugliese, will retain the remaining 10 percent of Amil shares for at least five years. Amil will invest about $470 million in UnitedHealth Group shares and hold those shares for five years, too.

United will pay $4.9 billion in cash for the 359 million outstanding common shares. Brazilian tax benefits worth an estimated $600 million would bring the deal to about $4.3 billion. Brazilian regulatory approval is expected in the fourth quarter.

UnitedHealth reports third-quarter earnings on Oct. 16 but said Monday it expects earnings of at least $1.45 per share. Analysts were expecting $1.25 according to Bloomberg.

After an initial bump following the announcement, UnitedHealth finished the day up less than 1 percent, to $57.60.

jcrosby@startribune.com • 612-673-7335 jbjorhus@startribune.com • 612-673-4683