UnitedHealth and Amedisys Merger Extension

(Reuters) – UnitedHealth and Amedisys (NASDAQ: AMED) have agreed to extend the deadline to close their $3.3 billion merger agreement to next year, according to a filing made on Friday. This decision comes as the deal faces increased scrutiny from the U.S. Department of Justice (DOJ).

The extension follows a lawsuit filed by the DOJ and three U.S. states, aimed at blocking the merger due to concerns that it could reduce competition in the home health services market.

The companies have established a new waiver agreement that extends the merger deadline to either 10 days after a final court verdict on the lawsuit or December 31, 2025, whichever occurs first.

In response to these developments, shares of Amedisys rose by 3.5% in premarket trading.

In June of last year, UnitedHealth (NYSE: UNH) announced plans to acquire home health and hospice caregiver Amedisys. Analysts had already anticipated regulatory scrutiny because of UnitedHealth's significant presence within the home health sector.

The DOJ has noted that eliminating competition between UnitedHealth and Amedisys could negatively affect patients receiving home health and hospice services, as well as insurers contracting for and nurses providing those services.

Attorneys general from Maryland, New Jersey, and New York have joined the lawsuit to block the merger.

Previously, the companies expected to finalize the deal by December 27. The new waiver includes a regulatory break fee of $275 million, which could rise to $325 million if they do not divest certain assets by May 1.

The DOJ had earlier attempted to block UnitedHealth's acquisition of tech unit Change Healthcare (NASDAQ: CHNG) in February 2022, though that deal was eventually completed later that year.