Senator Elizabeth Warren and Representative Pramila Jayapal have asked regulators to look into UnitedHealth Group’s (NYSE:UNH) planned $3.3 billion purchase of healthcare company Amedisys (NASDAQ:AMED), according to Bloomberg. According to a letter forwarded by the two, they argued that the deal should be scrutinized for anti-trust practices.
In the letter directed to DOJ antitrust chief Jonathan Kanter and FTC Chair Lina Khan, Warren and Jayapal raised concerns about the growing trend of insurers buying up health care providers. They mentioned that the acquisitions are most likely “to reduce competition and pad their profits at the expense of their patients.”
However, these concerns are not without reason. Since announcing the planned acquisition, Amedisys revealed in June that it received a request from the DOJ on the merger with UnitedHealth. A second request also came from the DOJ amid reports that the regulatory agency was launching an antitrust probe into the managed care sector.
“The acquisition of Amedisys by UHG is one such transaction that the agencies should examine, though by no means the only one of its kind,” Warren and Jayapal wrote in the letter. “We therefore urge the agencies to closely scrutinize this and other similar acquisitions and block any activity found to be illegal under antitrust law.”
For UnitedHealth, this is not the first regulatory scrutiny for the company. Last year, the company’s acquisition of ChangeHealthcare hit a roadblock after the DOJ challenged the deal. However, a court later allowed the $8 billion deal to move forward.
Is UnitedHealthcare a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UnitedHealthcare stock based on 17 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average price target of $572.83 per share implies a 12.79% upside potential.
