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Sanford Health Calls Off Fairview Merger

In light of public scrutiny, Fargo, N.D.-based Sanford Health has withdrawn from merger discussions with Minneapolis-based Fairview Health Services.

Sanford CEO Kelby Krabbenhoft made the announcement yesterday, saying his system's initial merger talks have "turned into a situation that finds us being unwelcome by some interested parties and key stakeholders of our proposed merger partner."

Mr. Krabbenhoft was referencing stakeholders in Minnesota, led by Attorney General Lori Swanson. Ms. Swanson held a public hearing on the potential Sanford-Fairview merger this past weekend after she and others had voiced concerns over Sanford's proposed merger deal, saying Fairview and Sanford should have involved public officials before the initial talks.

Sanford and Fairview executives began exploratory merger discussions in March, and soon thereafter, the University of Minnesota — which currently controls Fairview's flagship hospital, the University of Minnesota Medical Center, Fairview — indicated interest in buying the health system.

Mr. Krabbenhoft said neither Sanford nor Fairview saw a potential transaction as "acquiring or controlling the other," according to his statement. However, Sanford decided to bow out of the process and will only reconsider the merger "if Fairview and the University of Minnesota have sufficiently resolved issues within their relationship and secured a positive understanding by Attorney General Swanson of their intentions and plans."

Fairview Interim CEO Chuck Mooty said in a statement: "We understand why [Sanford] would choose to step back at this time, but the news comes as a disappointment. Our initial findings about a Fairview-Sanford partnership were positive, and the Fairview board was committed to fully understanding its potential benefit to our patients and communities. However, we respect Sanford's decision, and our board's current assessment of a Sanford partnership will stop."

More Articles on Hospital Mergers:

Edward Health Services to Change Name After Merger With Elmhurst
Minnesota Attorney General Begins Review of Fairview Health Bidders
Ascension Health Finalizes Marian Health System Merger

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