DoJ Delays Oracle-Cerner Merger

The U.S. Department of Justice will take more time to examine the planned $28.5 billion merger between the global software giant Oracle and health records specialist Cerner. The two parties have agreed to delay the closure of the deal while the Department of Justice examination takes place.

Both the DoJ and the Federal Trade Commission (FTC) will review the takeover of Cerner, based out of Kansas City, Missouri, with regard to anti-competition concerns. They are given the power to do so under the Hart-Scott-Rodino Act.

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The sale was expected to close on February 15, but Oracle extended its tender offer for the acquisition until March 16. All other conditions of the deal will remain the same, according to an Oracle press release and SEC filings.

The news that Oracle was looking to buy its way into the health records software market broke in December last year.

"Healthcare is the largest and most important vertical market in the world – $3.8 trillion last year in the United States alone," CEO Safra Catz said at the time. "Cerner will be a huge additional revenue growth engine for years to come as we expand its business into many more countries throughout the world." When she made this declaration, the world was in the midst—as it still is now—of recovering from the coronavirus pandemic. Since then, the healthcare market has arguably become even more important.

In 2018, Cerner agreed to a $10 billion deal with the Department of Veterans Affairs to upgrade its electronic health records system. Later, the budget was expanded to $16 billion. Last year, the department's Inspector General discovered that hospital workers were not being adequately trained on the new software during a pilot program at a small facility, so the timeline for the project has since been adjusted.

In the U.K., Cerner has won more than £100 million in NHS contracts in just the last year alone. Unfortunately for Cerner, it was also a key player in the National Programme for IT, which went down as one of the greatest IT disasters in public sector history.