Blockbuster Unitedhealth Group, Amedisys Deal Closes After Doj Battle Resolution

UnitedHealth Group’s (NYSE: UNH) acquisition of Amedisys (Nasdaq: AMED) closed on Thursday after a two-year-long process complicated by antitrust concerns.

The news comes one week after the U.S. Department of Justice (DOJ) announced a proposed settlement to end its opposition to the merger. The settlement’s requirements included that the companies divest at least 164 home health and hospice facilities worth approximately $528 million in annual revenue. It also imposed a $1.1 million civil penalty on Amedisys for false certification.

UnitedHealth’s services arm, Optum, agreed to acquire Amedisys for $3.3 billion in June 2023. 

“We’re pleased Optum’s combination with Amedisys has closed,” an Optum spokesperson told Home Health Care News in an email. “Home health care is a critical component in Optum’s commitment to value-based care, which is designed to keep patients healthy within their own homes. Together, we look forward to meaningfully improving home health and hospice care options for patients and their families.”

As part of the finalized merger, Amedisys repaid $399.2 million to retire all outstanding debt under its senior credit facilities.

Amedisys’ financial advisors included Guggenheim Securities and Evercore Group. Amedisys’ legal, regulatory, M&A and antitrust counsel included Paul, Weiss, Rifkind, Wharton & Garrison, Polsinelli and Simpson Thacher & Bartlett.

In connection with the merger, Amedisys will no longer be listed on the Nasdaq. The company requested that the Nasdaq cease trading its stock and withdraw its listing. Each share of Amedisys common stock was converted to $101 in cash, without interest, subject to taxes.

The companies’ path to merge was complicated by a lawsuit from the DOJ and state-level scrutiny. 

“The Justice Department will not hesitate to check unlawful consolidation and monopolization in the health care market that threatens to harm vulnerable patients, their families and health care workers,” former U.S. Attorney General Merrick B. Garland said in November.

UnitedHealth moved to dismiss the DOJ’s antitrust lawsuit, only to drop its motion. To avoid antitrust concerns from regulators, Amedisys attempted to divest some of its locations to home health and hospice company VitalCaring – only for the divestiture to be blocked. 

In May, Amedisys announced plans to sell home health and hospice centers to affiliates of the Pennant Group (Nasdaq: PNTG) and BrightSpring Health Services (Nasdaq: BTSG). While reports emerged that the DOJ rejected the divestiture to Pennant and BrightSpring, the deal seems poised to go through. Pennant announced last week that it would acquire between 38 and 50 agencies, to the tune of between $113 million and $147 million.

The completion of the Amedisys/UnitedHealth deal brings opportunities for other home health providers, experts told HHCN last week, as well as concerns.

Hiring and maintaining fair wages for home health clinicians could get more difficult for providers in overlapping markets, though some providers stand to acquire divested facilities at a “meaningful discount.” The deal will also accelerate the growing trend toward consolidation within the home health industry.

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