FTC Approves Deal for CHS-HMA Merger
YOUNGSTOWN, Ohio --– Community Health Systems Inc. and Florida-based Health Management Associates Inc. announced Wednesday that they reached an agreement with the Federal Trade Commission which will allow CHS to complete its acquisition of HMA.
Under the terms of the agreement with the commission, Tennessee-based CHS is required to divest two acute care facilities and related outpatient businesses owned by HMA subsidiaries, according to a statement issued by the two companies. Divesting the two facilities -- Riverview Regional Medical Center, a 281-bed hospital in Gadsden, Ala., and Carolina Pines Regional Medical Center, a 116-bed hospital in Hartsville, S.C. -- should not have a “meaningful impact,” on the combined company’s financial operations or cost savings, officials said.
The divestitures are required to be completed within six months after the FTC’s order is issued. Approval for CHS’s acquisition of HMA has also been received from the West Virginia Health Care Authority with respect to HMA’s facility in Williamson, W. Va. The HMA acquisition is expected to be completed by the end of January.
Going into the deal, HMA operates 71 hospitals in 15 states representing approximately 11,000 licensed beds. CHS, though its subsidiaries, owns, leases or operates 135 hospitals in 29 states representing about 20,000 aggregate beds. Locally, CHS owns ValleyCare Health System of Ohio, which operates Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland, along with other satellite operations.
Under the terms of the transaction, CHS will acquire each issued and outstanding share of the common stock of HMA for $10.50 in cash, 0.06942 of a share of CHS common stock, and a contingent value right, which could yield additional cash consideration of up to $1 per share, depending on the outcome of certain litigation involving the company. HMA shareholders approved the deal earlier this month.
Published by The Business Journal, Youngstown, Ohio.
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