FTC loses bid to block $320 million hospital merger in North Carolina
Updates with comment from Novant in paragraph 4
By Mike Scarcella
June 5 (Reuters) -A U.S. judge in North Carolina has denied the U.S. Federal Trade Commission’s request to block Novant Health’s $320 million acquisition of two hospitals in the state, a deal the agency said would lead to higher prices and reduced innovative care.
U.S. District Judge Kenneth Bell in a 55-page ruling said the FTC had not met its legal burden for a preliminary order halting the proposed transaction in the Charlotte, North Carolina, area.
Bell said the public’s interest was not “best served” by stopping Novant from buying the hospitals from Community Health Systems while the FTC pursues its antitrust challenge. The proposed merger “carries at least as much likelihood of competitive benefits as it does competitive harm,” the judge wrote.
The FTC declined to comment on Bell’s ruling.Novant chief executive Carl Amato in a statement called the ruling a "victory for the area" and said the court recognized "the additional benefits Novant Health will bring."
The court’s order allows the deal to move forward, but the FTC, which enforces antitrust law, can still ask an administrative law judge to determine the legality of the proposed transaction.
A hearing is scheduled for June 26, but both sides have asked for a 30-day continuance to streamline their presentations.
FTC Chair Lina Khan in remarks in February said the Biden administration’s antitrust enforcement agenda had put a focus on healthcare markets.
The agency in January sued Novant, which it said was among the largest hospital systems operating in the southeastern United States and “one of the most expensive” in North Carolina. The company announced its merger plans last year.
Novant’s proposed acquisitions of Lake Norman Regional Medical Center and Davis Regional Medical Center would “significantly increase concentration in an already highly concentrated market,” according to the FTC.
Novant has said it wanted to “acquire and revitalize two struggling hospitals.”
Bell in his order said “the court may not simply rubber stamp the FTC's request for an injunction upon the showing of a mere possibility that the antitrust laws will be violated.”
The case is Federal Trade Commission v. Novant Health Inc and Community Health Systems Inc, U.S. District Court for the Western District of North Carolina, No. 5:24-cv-00028.
For FTC: Nathan Brenner of the FTC
For Novant Health: Heidi Hubbard of Williams & Connolly
For Community Health Systems: Michael Perry of Gibson, Dunn & Crutcher
Read more:
PE firm Welsh Carson dodges FTC case over U.S. Anesthesia Partners acquisitions
North Carolina backs FTC bid against $320 million health system deal
HCA Healthcare must face antitrust case over health costs, US judge says
Chicago's NorthShore hospital to pay $55 mln in class-action settlement
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
