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Novant Scraps $320M Hospital Deal After FTC Court Block

 |  June 18, 2024

Novant Health has decided to abandon its $320 million acquisition of two North Carolina hospitals from Community Health Systems after a U.S. appeals court temporarily blocked the deal. This decision follows a ruling from the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, which sided with the Federal Trade Commission (FTC).

The Winston-Salem-based healthcare provider announced its decision on Tuesday, shortly after the appeals court’s 2-1 ruling to suspend the transaction while the FTC challenged a lower court’s approval of the deal.

“We are steadfast in our belief that these facilities and their patients would have greatly benefited from joining Novant Health, but with the FTC’s continued roadblocks, we do not see a way to finalize this transaction,” Novant Health stated, according to Reuters.

The FTC had filed an administrative action in January to block the deal, arguing that it would lead to higher prices and reduced innovative care. However, U.S. District Judge Kenneth Bell in Charlotte had ruled on June 5 that the public interest was not “best served” by stopping the merger, suggesting the merger offered as much potential for competitive benefits as it did for competitive harm.

Despite Judge Bell’s decision, the FTC appealed to the 4th Circuit and requested a halt to the transaction. FTC Chair Lina Khan has identified healthcare markets as a key focus of the Biden administration’s antitrust enforcement efforts.

A hearing in the FTC’s administrative case against the hospital acquisition is scheduled for July 26. The case is formally titled Federal Trade Commission v. Novant Health Inc and Community Health Systems Inc, 4th U.S. Circuit Court of Appeals, No. 24-1526.

Source: Reuters