By Josh Nathan-Kazis
A new Department of Justice lawsuit has put at risk UnitedHealth Group's effort to buy Amedisys, one of the country's largest providers of home health and hospice care for older people.
UnitedHealth itself is already one of the largest providers of home health and hospice care in the U.S. In a suit seeking to block the deal, filed Tuesday in a federal district court in Maryland, the DOJ's antitrust division argued that the combination would hurt consumers and the nurses who work for the companies.
"The fact that this merger would extinguish competition at the expense of Americans is not a secret," the lawsuit says. In addition to the DOJ's antitrust division, the suit was also brought by state attorneys general from Maryland, Illinois, New Jersey, and New York.
In a statement, UNH's Optum division said the merger with Amedisys would be good for patients and for competition. "We will vigorously defend against the DOJ's overreaching interpretation of the antitrust laws," the company said.
UnitedHealth shares were down 1.5% Tuesday afternoon, while shares of Amedisys were down 2% to $90.80.
UnitedHealth agreed to buy Amedisys in an all-cash deal for $101 per share, or approximately $3.3 billion, in June 2023. That deal came shortly after UnitedHealth closed a $5.4 billion acquisition of LHC Group, yet another large home-health provider.
A home infusion provider called Option Care Health had agreed to buy Amedisys that May in an all-stock deal that valued Amedisys at $3.6 billion, but Amedisys backed out of that deal in favor of the UnitedHealth offer.
Displeasure over the proposed deal from state and federal regulators has kept it from closing over the past year. UnitedHealth and Amedisys said in June they would sell some home healthcare centers to another provider, VitalCaring Group, to ease the deal along. DOJ lawyers dismissed the divestment effort in their suit, saying it wouldn't "eliminate the threat to competition presented by the merger."
Analysts had said over the summer that the deal was all set to close, and the stock was trading above $98, near the deal price. "We see minimal risk that the UnitedHealth-Amedisys deal does not close," William Blair analyst Matt Larew wrote in a July 1 note.
Four months later, the future of the deal seems far less clear.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 12, 2024 14:34 ET (19:34 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments