UnitedHealth Group and home health company Amedisys have agreed to extend the deadline for a planned $3.3 billion merger due to a legal challenge by the Department of Justice.
In a Dec. 26 regulatory filing, the two companies waived their right to terminate the agreement if it does not occur before an agreed-upon date: either 10 business days after a final court ruling that blocks the merger or December 31, 2025. They also made adjustments to the terms, including a potential penalty fee of up to $325 million if regulatory conditions aren't met.
UnitedHealth's Optum first announced its plans to merge with Amedisys in June 2023. The Baton Rouge, La.-based company was founded in 1982 and provides home health, hospice and high-acuity care services across more than 500 care centers in 37 states and the District of Columbia.
In November, the Justice Department sued to block the deal in a Maryland federal court, citing concerns of lessened competition in the home health market because the two companies are "direct competitors." The lawsuit claims the purchase could increase home healthcare prices across 23 states and in Washington, DC. The Attorneys General of Maryland, Illinois, New Jersey, and New York have also joined the complaint.
The proposed merger has been under an antitrust review by the DOJ since August 2023. In March 2024, Oregon regulators opened their own review after a preliminary report found the deal could hurt competition in the state's home health markets.
Amedisys shareholders approved the acquisition in September 2023.
"We remain committed to the transaction, which we believe will create more opportunities to deliver quality, compassionate and value-based care to patients and their families. We look forward to supporting Optum in presenting our case," a spokesperson for Amedisys told Becker's.
UnitedHealth Group has rapidly grown its home care capabilities in recent years. In February 2023, the company closed on its $5.4 billion acquisition of home health firm LHC Group, which operates more than 900 facilities. If UnitedHealth's acquisition of Amedisys is approved, the company would own around 10% of the home health market, with significant overlap between Amedisys and LHC acquisitions in some Southern states.
In June 2024, Amedisys and UnitedHealth agreed to sell an unknown number of care centers to VitalCaring Group to make the deal more palatable to regulators.
Separately, the DOJ launched an antitrust investigation into UnitedHealth Group in February 2024, probing the company's relationship between its insurance unit, UnitedHealthcare, and Optum. In 2022, the Justice Department unsuccessfully attempted to block UnitedHealth from acquiring data and analytics company Change Healthcare for $7.8 billion.