Teladoc to Buy Livongo for $18.5b

Teladoc Health, an industry leader in telehealth, announced on Wednesday that it will acquire Livongo Health for $18.5 billion. The merger will combine Teledoc’s expertise in virtual healthcare with Livongo’s specialty in chronic condition management. Under the agreement’s terms, Livongo shareholders will own about 42 percent of the combined company while Teladoc shareholders will own approximately 58 percent.

The combination of the two companies will create “a global leader in consumer centered virtual care,” according to Teladoc’s press release. Forbes noted that demand for virtual doctor visits has risen dramatically this year because of COVID-19. This demand “has spurred huge growth for companies in the business of virtual care, a sweet spot, which Teladoc and Livongo Health will continue to capitalize on.”

Jason Gorevic, CEO of Teladoc, believed that the merger will Livongo will produce great results in the management of chronic illnesses. “Livongo is a world-class innovator we deeply admire and has demonstrated success improving the lives of people living with chronic conditions,” he said. “Together, we will further transform the healthcare experience from preventive care to the most complex cases, bringing ‘whole person’ health to consumers and greater value to our clients and shareholders as a result.” Once the merger is completed, Gorevic will be CEO of the combined company.

Livongo founder Glen Tullman thought that the merger would be profitable for shareholders due to the potential for a widened market. “This transaction recognizes Livongo’s significant progress and will enable Livongo shareholders to benefit from long-term upside as the combined company is positioned to serve an even larger addressable market with a truly unmatched offering.”

The transaction is expected to close at the end of the fourth quarter of 2020. It is subject to regulatory and shareholder approvals from both companies. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor to Teladoc and Skadden, Arps, Slate, Meagher & Flom LLP provided legal advice to Livongo.