UnitedHealth, Amedisys extend deadline to close $3.3 billion deal
11:55 am Friday, December 27th, 2024
(Reuters) -UnitedHealth and Amedisys have agreed to extend the deadline to close their $3.3 billion merger agreement to next year, a filing showed on Friday, as the deal faces close scrutiny from the U.S. Department of Justice.
The extension comes more than a month after the DOJ and three U.S. states filed a lawsuit to block the deal, citing concerns that it would reduce competition in the home health services market.
The companies have entered into a new waiver agreement, which extends the merger deadline to 10 days after a final court decision is issued in the lawsuit or Dec. 31, 2025, whichever is earlier, the filing said.
Shares of Amedisys rose 3.5% in premarket trading.
UnitedHealth said in June last year it would acquire home health and hospice caregiver Amedisys. Analysts, however, anticipated regulatory scrutiny due to the healthcare conglomerate’s presence in the home health sector.
Eliminating competition between UnitedHealth and Amedisys can harm patients who receive home health and hospice services as well as insurers who contract for and nurses who provide these services, the DOJ has said.
The attorneys general of Maryland, New Jersey and New York are also suing to block the merger.
The companies had earlier expected to close the deal by Dec. 27. The new waiver includes a regulatory break fee of $275 million, which may increase to $325 million, if they fail to divest some assets by May 1.
The justice department had previously sued to halt UnitedHealth’s acquisition of tech unit, Change Healthcare, in February 2022, but the deal was completed later that year.
(Reporting by Sriparna Roy in Bengaluru; Editing by Anil D’Silva and Shilpi Majumdar)
