Amedisys and UnitedHealth Extend Merger Deadline - What's Going On?

Amedisys Inc (NASDAQ:AMED) shares are trading higher on Friday after the company announced it extended its merger deadline with UnitedHealth Group Incorporated (NYSE:UNH).

In an exchange filing, the companies entered into a waiver agreement, further advancing their merger deal, originally announced on June 26, 2023.

Under the terms of the agreement, Merger Sub, a wholly owned subsidiary of UnitedHealth, will merge with Amedisys, with Amedisys continuing to operate as a subsidiary of UnitedHealth Group.

The companies have agreed to push their $3.3 billion merger deadline to next year. This extension follows intense scrutiny from the U.S. Department of Justice, Reuters reports.

Over a month ago, the DOJ and three U.S. states filed a lawsuit to prevent the deal. They argued that the merger would harm competition in the home health services market.

Also Read: Amedisys, Rigetti Computing And Other Big Stocks Moving Higher On Friday

The waiver allows both Amedisys and UnitedHealth Group to extend the period during which they cannot terminate the merger due to delays.

The companies have agreed to waive their right to terminate the agreement until the earlier of two conditions: 5:00 p.m. New York time on the tenth business day after a final order from the U.S. District Court for the District of Maryland permanently blocking the merger, or 11:59 p.m. on December 31, 2025.

The waiver ensures that the merger process remains in effect until one of these deadlines is reached.

The waiver also includes important financial and operational adjustments. The Regulatory Break Fee under the merger agreement is set at $275 million, which could increase to $325 million if certain divestiture milestones are not met.

Additionally, the waiver modifies certain operational restrictions and closing conditions, particularly those related to government approvals, and increases the revenue-related aspect of the "Burdensome Condition" definition.

Despite regulatory scrutiny and potential challenges, this waiver marks a key development in the ongoing efforts to finalize the merger.

The companies continue to work toward completing the deal, which is expected to provide both parties substantial synergies and growth opportunities.

Price Action: UNH shares are trading lower by 0.52% to $508.47 at last check Friday. AMED is up 4.48%.

Now Read This:

• Top 3 Tech And Telecom Stocks That May Rocket Higher In Q4