The U.S. Department of Justice is seeking more information about CVS Health’s (NYSE: CVS) pending $8 billion deal to purchase Signify Health (NYSE: SGFY).
The request from the Justice Department will draw out the amount of time CVS and Signify will have to wait before proceeding with the deal by 30 days. The government could set aside this requirement, though.
After the deal was announced, experts predicted that the transaction would come under scrutiny in a U.S. antitrust review, according to reports from Reuters.
“I would think in ordinary times, this one could go through,” Seth Bloom, president and founder of Bloom Strategic Counsel and a former general counsel to the U.S. Senate Judiciary Committee’s antitrust subcommittee, told Reuters. “It will be a tough one to get through a Lina Khan-run [Federal Trade Commission].”
Khan was sworn in as chair of the Federal Trade Commission (FTC) in 2021. Health care deals have long been a priority for the FTC.
Along these lines, CVS isn’t the only company coming under review due to an acquisition. UnitedHealth Group (NYSE: UNH) and LHC Group Inc. (Nasdaq: LHCG) each received a request from the FTC regarding the former’s pending $5.4 billion purchase of the latter. That deal, first announced in March, has still not been completed.
Plus, last month the FTC requested more information about Amazon’s (Nasdaq: AMZN) plan to buy One Medical (Nasdaq: ONEM) for $3.9 billion.
On its end, Signify’s interest in a sale first came to light in August.
The following month, CVS announced that it entered into a definitive agreement to acquire Signify.
Dallas-based Signify is a tech-enabled, value-based care platform that partners with both health plans and health systems to deliver a variety of care services to patients in their homes. The company has over 10,000 clinicians across all 50 states and a nationwide value-based provider network.
Though CVS won the bid, it wasn’t the only entity interested in purchasing Signify. UnitedHealth Group, Option Care Health and Amazon were reportedly in the running to acquire the company.
Despite the Justice Department’s request, CVS expects to complete the acquisition in the first half of 2023, according to documents filed to the Securities and Exchange Commission Thursday.
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