UnitedHealth, Amedisys extend merger deadline amid DOJ scrutiny

Investing.com -- UnitedHealth (NYSE:UNH ) and Amedisys (NASDAQ:AMED ) have decided to extend the deadline for their $3.3 billion merger agreement into the next year, according to a recent filing. This decision comes as the deal is under close examination by the U.S. Department of Justice.

Over a month ago, the DOJ, along with the states of Maryland, New Jersey, and New York, filed a lawsuit to stop the merger. They expressed concerns that the deal could decrease competition in the home health services market.

A new waiver agreement has been signed by the companies, pushing the merger deadline to 10 days after a final court decision is made in the lawsuit or until Dec. 31, 2025, whichever comes first. This was revealed in the filing.

In the premarket trading, Amedisys' shares saw a slight increase.

In June of last year, UnitedHealth announced its plans to acquire Amedisys, a home health and hospice caregiver. Analysts, however, foresaw regulatory scrutiny due to UnitedHealth's significant presence in the home health sector.

The DOJ has expressed that eliminating competition between UnitedHealth and Amedisys could negatively impact patients who rely on home health and hospice services, insurers who contract for these services, and nurses who provide them.

Previously, the companies had planned to close the deal by Dec. 27. The new waiver includes a regulatory break fee of $275 million, which could rise to $325 million, if they fail to divest some assets by May 1.

In February 2022, the justice department had also sued to stop UnitedHealth's acquisition of the tech unit, Change Healthcare (NASDAQ:CHNG ). However, the deal was finalized later that same year.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Source: Investing.com