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After 4-year battle, Cottage Health and Sansum Clinic call off merger

After a four-year fight to gain federal regulatory approval for their proposed merger, Santa Barbara, Calif.-based Cottage Health and Sansum Clinic, also in Santa Barbara, called off the deal, according to Noozhawk.

The merger, which officials initially announced in June 2013, would have combined Cottage Health's three hospitals and various enterprises with roughly 24 Sansum-owned outpatient clinics across Santa Barbara County, according to the report.

Ron Werft, president and CEO of Cottage Health, and Kurt Ramsohoff, MD, president, CEO and CMO of Sansum Clinic, said the Federal Trade Commission rejected the organizations' merger proposal on grounds that the merger would prove anticompetitive.

Though Cottage Health reportedly agreed to divest its interest in its outpatient centers, regulators said the move would not likely improve competition in the marketplace, according to the report.

Officials said the two organizations have worked together in some capacity for the last 100 years, and would "continue to do so in the future," according to the report.

"We did believe the merits of the deal were very justified, in the fact that [Sansum Clinic,] an outpatient organization, [was] merging with a predominantly inpatient organization," Mr. Werft told Noozhawk during a phone interview Thursday. "Along the way, the Federal Trade Commission, after looking at the data and interviewing folks, focused in … on the very small areas where we have competitive overlap."

More articles on transactions and valuations:
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Molina Healthcare affiliates with 130-member New York physician practice

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