UnitedHealth Group pushes back deadline for Change Healthcare acquisition
The deal may now be finalized in April 2022, though this isn't the first delay, largely owing to an ongoing DOJ investigation.
Photo courtesy of United Healthcare
UnitedHealth Group has delayed the deadline for its pending acquisition of Change Healthcare, likely owing to an ongoing investigation into the merger by the Department of Justice.
A new filing with the Securities and Exchange Commission indicates the deal may now be finalized in April 2022. Prior to the filing there had not been a specific date set, though officials from both companies had expected the deal to go through sometime during the first part of next year.
This isn't the first time the merger agreement has been delayed. In November, the two companies agreed not to consummate their merger before February 22, 2022, unless they receive written notice from the Department of Justice prior to the date that the DOJ has closed its investigation. The merger is also subject to the potential unavailability of certain data requested by the DOJ.
The right to push back the final date was established in the original merger agreement.
WHAT'S THE IMPACT?
The merger would combine Change's data analytics capabilities with UnitedHealth's OptumInsight.
The acquisition has received pushback from certain groups, including the American Hospital Association, which has said the merger threatens to reduce competition for the sale of healthcare information technology services to hospitals and other healthcare providers.
After the DOJ received a letter from the AHA, it asked both Change and UnitedHealth Group for additional information. Both Change and UnitedHealth Group have now certified substantial compliance with the second request for information, Change said in a November earnings statement.
"The parties have been working cooperatively with the DOJ and will continue to do so," the company said.
THE LARGER TREND
On January 5, OptumInsight and Change Healthcare announced their proposal to combine. Under the terms of the agreement, UnitedHealth Group, through its wholly-owned subsidiary, would acquire all of the outstanding shares of Change Healthcare common stock for $25.75 per share in cash.
On March 24, Change and UnitedHealth Group each received a request for additional information and documentary materials in connection with the DOJ's review of the merger.
On August 7, the companies entered into a timing agreement with the DOJ agreeing not to consummate the merger before 120 days following the date on which both parties certified substantial compliance with the second request by the DOJ.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
