Judge signs off on UnitedHealth-Change deal, rejects DOJ challenge

A Washington, D.C., federal judge cleared the path for UnitedHealth Group to move forward with the $7.8 billion acquisition of Change Healthcare, which has been highly scrutinized by the federal government.

The Justice Department sued to halt the deal earlier this year, calling it anticompetitive because Change Healthcare, which would be merged with UnitedHealth Group's data and consulting business Optum Insights, has access to data from insurer customers. UnitedHealth Group argued Optum is separate from its insurance arm, UnitedHealthcare, and the deal should go through because there are policies in place to protect sensitive data.

U.S. District Judge Carl Nichols agreed and ruled in favor of the merger Sept. 19, rejecting the Justice Department's lawsuit. However, he did direct UnitedHealth Group to divest its claims-editing business ClaimsXten to private equity firm TPG Capital for $2.2 billion, a move the company previously proposed.

Change Healthcare's share price rose more than 7 percent after the ruling became public, according to Bloomberg.

"We are pleased with the decision and look forward to combining with Change Healthcare as quickly as possible so that together we can continue our work to make the health system work better for everyone," said UnitedHealth Group in an emailed statement.

The Justice Department disagrees with the court's decision and is evaluating next steps, according to a statement issued by Jonathan Kanter, assistant attorney general for the antitrust division.

"Protecting competition and access to affordable healthcare is of the utmost importance to the Antitrust Division and the Department of Justice," he wrote. "We are grateful to the Antitrust Division staff — the attorneys, economists, paralegals and administrative professionals — who work tirelessly to uphold the value of competition."

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