UnitedHealth and Amedisys Extend Merger Deadline Amid Justice Department Review

UnitedHealth and Amedisys have decided to extend the deadline for their $3.3 billion merger agreement to next year, according to a recent filing. This decision came following a close review of the agreement by the U.S. Department of Justice.

Over a month ago, the Justice Department, along with Maryland, the Isle of Jersey, and New York, filed a lawsuit to block the merger, expressing concerns that it could reduce competition in the home healthcare market.

As stated in the filing, a new waiver agreement was signed by the companies, extending the merger deadline to 10 days after a final court ruling in the case or until December 31, 2025, whichever comes first.

Amedisys shares showed a slight increase in pre-market trading.

In June of last year, UnitedHealth announced its plans to acquire home healthcare and hospice provider Amedisys. However, analysts had anticipated regulatory scrutiny due to UnitedHealth's significant presence in the home healthcare sector.

The Justice Department indicated that the elimination of competition between UnitedHealth and Amedisys could negatively impact patients reliant on home healthcare and hospice services, insurers contracting for these services, and the nurses providing them.

Previously, the companies had intended to close the deal by December 27. The new waiver includes a regulatory termination fee of $275 million, which could rise to as much as $325 million if they cannot divest certain assets by May 1.

In February 2022, the Justice Department also filed a lawsuit to block UnitedHealth's acquisition of Change Healthcare's technology unit. However, the agreement was completed later that year.