UnitedHealth, Amedisys offer divestitures as $3.3B merger advances
Amedisys and UnitedHealth Group have agreed to divest some of their home healthcare and hospice businesses, as the two companies look to appease regulators who are concerned their $3.3 billion merger would lead to overconsolidation in the market.
The U.S. Department of Justice (DOJ) sued last November to block the buyout, citing 20 states the agency believes would be stuck with limited options for clinical care at home, should it proceed. Multiple states have signed on as co-plaintiffs, including Maryland, New York, New Jersey and Illinois. They argue that consumer choice would be irreparably diminished by UnitedHealth’s Optum taking over Amedysis’s market share. According to the DOJ, without concessions, Optum would control 30% of the home healthcare market in some states, representing an unacceptable level of control.
In April, a federal judge overseeing the case ordered the agency to enter mediation with the companies to hammer out a deal that would make the transaction palatable.
The two companies previously agreed to divest 120 of their overlapping medical facilities, but the offer was not sufficient to bring the lawsuit to a close. However, that deal was later scrapped, as it was not enough to appease the DOJ.
This second attempt, however, comes with confirmed buyers. Pennant and BrightSpring Health Services—both smaller home-care companies—have agreed to purchase some of the businesses from UnitedHealth and Amedisys.
Specifically, Pennant and BrightSpring will take over some of Amedisys’s home health and hospice centers, as well as a portion of UnitedHealth’s primary and specialty care clinics.
But, the deal is contingent on the merger between the two giants moving forward.
The potential purchase was revealed in a filing with the Securities and Exchange Commissions (SEC), but it’s not clear if it’s enough to get the DOJ—and the coalition of states—to end their legal blockade.
Financial details were not included in the initial filing. However, in its own report to the SEC, Pennant disclosed it was purchasing assets for $102.5 million.
The fate of the merger, divestitures, and legal challenge is expected to be decided in federal court later this year.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.