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NEWS

(Reuters) -UnitedHealth Group has agreed to sell Change Healthcare’s claims editing business for $2.2 billion in a move some analysts say could ease regulatory hurdles in the way of an $8 billion merger between the healthcare companies.

Earlier this year, the U.S. Department of Justice (DoJ) sued to stop the acquisition for giving UnitedHealth access to competitors’ data, forcing the companies to extend the deal’s closing date by nine months to Dec. 31.

The sale of the claims business, to private equity firm TPG Capital, will only go through once UnitedHealth’s acquisition of Change is complete, Change said in a regulatory filing. https://www.sec.gov/ix?doc=/Archives/edgar/data/1756497/000119312522116452/d574197d8k.htm

UnitedHealth and Change offer competing softwares for processing healthcare claims and together serve 38 of the top 40 health insurers in the country, the DoJ said in its complaint in February.

Owning Change’s claims business, ClaimsXten, would offer UnitedHealth a window into rival health plans at Humana Inc, Anthem Inc <ANTM.N, CVS Health Corp’s Aetna and Cigna Corp, the agency said.

Citi analyst Daniel Grosslight said the sale of the claims business will likely remove the DoJ’s argument against the merger, and potentially increase the probability of the deal going through.

We do not think this will reduce the value of Change to UnitedHealth as there is significant overlap between ClaimsXten and Optum’s PI solution,” Grosslight wrote in a note.

Optum is UnitedHealth’s health services unit which will absorb Change if the acquisition is completed.

UnitedHealth, which has said it would fight the lawsuit, did not have any further comments on the deal beyond the regulatory filing.

Shares of Change Healthcare were up 1.03% at $23.8, while UnitedHealth fell about 1% to $515.70.

It looks like the market is betting that this transaction could grease the wheels of getting the deal done, considering the Change share movement today in a down market,” Morningstar analyst Julie Utterback told Reuters.

(Reporting by Mrinalika Roy in Bengaluru; Editing by Devika Syamnath)

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