UnitedHealth/Emis: CMA Seeks Broader Asset Divestitures

Published on Apr 05, 2023

UnitedHealth Group’s (UNH) plan to buy health care software and systems provider Emis Group (EMIS: LN) is said to have been pushed to an in-depth review by the Competition and Markets Authority because the watchdog sought asset divestures beyond those owned by the buyer in the UK.

The CMA’s summary of its phase 1 decision on the $1.5 billion transaction appeared to foreshadow both its rejection of the companies’ remedy offer and the focus of the extended probe
going forward.

The regulator on March 17 took issue with the deal, suggesting that the combination of UnitedHealth’s Optum UK business with Emis could harm competition in two areas: population health management and medicine-optimization software.

To address those misgivings, UnitedHealth had proposed selling Optum UK’s Medicines Optimisation and Population Health Management businesses in the UK.

But the CMA’s concerns about competition in the population health management services market referenced the area as “a growing market and an area of focus for Optum and [UnitedHealth].”

One possible reason that the CMA rejected the proposed remedy is that the agency worries that
UnitedHealth might eventually return to the UK’s population health management sector post-merger.

That concern might have been addressed thorough an undertaking by the buyer not to re-enter the UK market and solicit for customers for a certain amount of time.

But the CMA’s misgivings about the remedy offer made by UnitedHealth are said to have been such that a divestiture of at least some of the buyer’s non-UK assets would have been necessary to secure a phase 1 approval.

“Optum UK and Emis are currently considering their options and will provide a further update with regards to the acquisition in due course,” the companies said in a statement responding to the CMA’s phase 2 referral decision.

Spokespeople for UnitedHealth and Emis Group declined to comment. A spokesperson for the CMA didn’t immediately respond to requests for comment.