Amazon’s Shadow Looms Over Walmart-Humana Deal: Term Sheet March 30

HEALTHCARE WARS

Good morning, Term Sheet readers.

HOUSEKEEPING: I’ll be in San Francisco next week, so my wonderful colleague Lucinda Shen will be compiling the deals below. This means that if you have a deal for Term Sheet, please send it to Lucinda at lucinda.shen@fortune.com. Thank you in advance!

---

BOMBSHELL DEAL: Walmart is in preliminary talks to buy insurer Humana Inc, according to The Wall Street Journal. If the deal goes through, it would be the retail giant’s largest one by far as Humana has a market value of approximately $37 billion. This is a deal that would have the power to suddenly transform Walmart into one of the nation’s largest health insurers. It’s not as crazy as it seems. Let’s not forget that Walmart is the world’s biggest retailer, but it’s also a major drugstore operator with locations in most of its ~ 4,700 U.S. stores and some Sam’s Club warehouse locations.

A lot is going on in healthcare right now with CVS Health agreeing to buy Aetna in a $69 billion deal and Cigna Corp agreeing to buy Express Scripts Holding for $54 billion. Just a few days ago, The American Antitrust Institute sent a letter to the U.S. Department of Justice urging the agency to block CVS’ planned purchase of Aetna. “Together with the merger of Express Scripts-Cigna, CVS-Aetna would trigger a fundamental restructuring of the U.S. healthcare system,” it said.

Well, if Walmart enters the game, you better believe the U.S. healthcare system will get restructured.

From the WSJ story:

Humana is a Medicare-focused insurer that could deepen Walmart’s relationship with a key demographic—seniors—at a time when the retailer is being threatened by Amazon on several fronts.

For Walmart, a deal would hand it a new role in health care, as well as a rich trove of data. In addition to its pharmacies, Walmart already has some primary-care clinics and recently said it would work with a major laboratory company to begin offering lab-testing services in some stores.

It’s important to note here that Amazon’s shadow is always looming. The giant continues to edge its way into the healthcare industry. In January, it announced it would partner with Berkshire Hathaway and JPMorgan Chase on a venture to reduce their employees’ health-care costs. It rolled out a line of private label over-the-counter medicines and is building a business selling a wide array of medical supplies to doctors, dentists and hospitals. It also recently expanded its discounted Amazon Prime program to beneficiaries of Medicaid, the government health-coverage program for lower-income people.

But could it be possible that Walmart emerges as the winner in the healthcare arms race? Larry Levitt, senior vice president at the Kaiser Family Foundation, told CNN Money that it’s likely: "Walmart has a better chance to disrupt health care than Amazon. People still get their health care in person and there are Walmarts all over the place." I would love to hear your thoughts on this one.

THE LATEST FROM FORTUNE...

• Tesla Pushes Workers to 'Prove the Haters' Wrong(by Kirsten Korosec)

• Why Drug Overdoses Are on the Rise and Getting Worse in America (by Sy Mukherjee)

• 150 Million MyFitnessPal Accounts Have Been Hacked, Under Armour Says

• Commentary: Who Wins After U.S. Antitrust Regulators Attack? China.(by Robert D. Atkinson & Michael Lind)

...AND ELSEWHERE

Tesla recalls 123,000 Model S cars over bolt issue. China looked at investing in SoftBank’s $100 billion tech fund. NYSE in talks to acquire Chicago Stock Exchange. Global mergers and acquisitions reach record high in first quarter.

VENTURE DEALS

•Accolade, a Plymouth Meeting, Penn.-based on-demand health care concierge company, raised $50 million in funding. Investors include Andreessen Horowitz, Carrick Capital Partners, Madrona Venture Group and McKesson Ventures, Cross Creek Advisors and Madera Technology Partners.

•FoodLogiQ, a Durham, N.C.-based SaaS provider of traceability, food safety and supply chain transparency solutions, raised $19.5 million in funding. Renewal Funds led the round, and was joined by investors including Testo, Tyson Ventures, Pontifax AgTech, Nicola Wealth Management and Greenhouse Capital.

•Wondery, a West Hollywood, Calif.-based podcast network, raised $5 million in Series A funding. Greycroft’s Alan Patricof, Lerer Hippeau and Advancit Capital led the round, and was joined by investors including BAM Ventures, Water Tower Ventures, Fox Networks Group and BDMI.

•Cubigo, a Belgium-based cloud-based platform provider for the senior living market, raised $4.5 million in Series A funding. Urbain Vandeurzen led the round, and was joined by investors including Transvision.

•Tech Valley, a China-based big data technology and application service provider, raised more than $3.19 million in its Series A funding. CRRC-Times Fund and Green Pine Colorful Dream led the round.

•6D.ai, a San Francisco-based developer of APIs for AR apps across all platforms, raised funding of an undisclosed amount. General Catalyst led the round.

HEALTH AND LIFE SCIENCES DEALS

•Tempest Therapeutics, a San Francisco-based biotechnology company, raised $70 million in Series B funding. Investors include Versant Ventures, F-Prime Capital Partners, Quan Capital, Lilly Asia Ventures, Foresite Capital and Eight Roads Ventures.

PRIVATE EQUITY DEALS

•Ascensus, which is backed by Genstar Capital and Aquiline Capital Partners, agreed to acquire ASPERIA, a Worcester, Mass.-based third-party administration firm. Financial terms weren't disclosed.

•Integro Insurance Brokers, which is owned by Odyssey Investment Partners LLC, agreed to acquire Hawkes Bay Holdings Ltd, the parent company of Tyser & Co Ltd, a U.K.-based insurance broker. Financial terms weren't disclosed.

IPOs

•Notre Dame Intermédica Participações SA, the Brazilian healthcare provider, is seeking to raise between 1.8 billion reais ($546 million) and 2.1 billion reais. Bain Capital backs the company. Read more.

•Volkswagen, the carmaker, could IPO its trucks and buses division as soon as May 2, Reuters reports citing sources. Read more.

EXITS

•American Securities acquired Prince, a Houston, Texas-based maker of mineral-based specialty additives, from Palladium Equity Partners. Financial terms weren't disclosed.

•Platinum Equity acquired Husky Injection Molding Systems, a Canada-based provider of injection molding equipment and services for the plastics industry, for $3.85 billion. The sellers were Berkshire Partners and OMERS Private Equity.

•Sun Capital Partners has sold Albéa, a France-based supplier of tube, fragrance, cosmetic plastic and metal packaging and dispensing pumps, to PAI Partners. Financial terms weren't disclosed.