LHC Group Inc. (Nasdaq: LHCG) had dropped close to 3.5% by market close on Thursday after a report suggested that the Federal Trade Commission (FTC) is reviewing its pending deal with UnitedHealth Group (NYSE: UNH) again, this time due to a potential vertical harm theory.
Broadly, vertical harm theory concerns generally are tied to market competition concerns. Other factors could include misusing sensitive customer information, forestalling or eliminating entry, increasing opportunities to collude, or evading taxation or regulations.
The FTC’s information gathering has almost reached its conclusion, according to reports from Seeking Alpha, which cited traders and a Capitol Forum report.
Additionally, UnitedHealth has reportedly hired an attorney who previously defended the company against the FTC regarding its purchase of Change Healthcare.
Originally, the pending acquisition was announced in March 2022. UnitedHealth Group is set to purchase LHC Group for $170 per share. When and if the deal closes, the company will be integrated into UnitedHealth Group’s Optum.
In June, the FTC issued both entities a request for more information regarding the transaction. Both companies also received a second request from the FTC reportedly related to worker pay in the home health sector.
Last month, it came to light that UnitedHealth’s LHC Group acquisition was slated to be finalized in the first quarter of 2023, according to a filing with the U.S. Securities and Exchange Commission (SEC).
“As previously disclosed, on June 10, 2022, the company and UnitedHealth Group each received a request for additional information and documentary materials from the U.S. Federal Trade Commission (FTC) in connection with the FTC’s review of the merger,” the filing read. “On December 6, 2022, the company and UnitedHealth Group certified to the FTC their substantial compliance with their respective second requests. As a result of the foregoing, the company expects the closing of the transactions contemplated by the merger agreement, including the merger, to occur in the first quarter of 2023.”
On its end, LHC Group also pushed back the termination date for its sale to UnitedHealth Group to March 28.
