UnitedHealth Group (NYSE: UNH) and Amedisys (NASDAQ: AMED) 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 December 31, 2025, whichever is earlier, the filing said.
Amedisys (NASDAQ: AMED) shares rose 4.65% in afternoon trading.
In June 2023, UnitedHealth said it would acquire home health and hospice caregiver Amedisys. However, analysts anticipated regulatory scrutiny due to the healthcare conglomerate’s presence in the home health sector.
Eliminating competition between UnitedHealth (NYSE: UNH) and Amedisys (NASDAQ: AMED) 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 December 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.
In February 2022, the Justice Department sued to halt UnitedHealth’s acquisition of tech unit Change Healthcare, but the deal was completed later that year.
