FTC continues to challenge $320M Novant, CHS deal

The Federal Trade Commission filed court documents on March 25 seeking a preliminary injunction to bar Winston-Salem, N.C.-based Novant Health from its $320 million acquisition of two North Carolina hospitals from Franklin, Tenn.-based Community Health Systems.

According to court documents filed in the U.S. District Court for the Western District of North Carolina, the FTC alleged that Novant Health's proposed acquisition of Mooresville, N.C.-based Lake Norman Regional Medical Center and Statesville, N.C.-based Davis Regional Medical Center from Community Health Systems, would "irreversibly consolidate the market for hospital services in the Eastern Lake Norman Area in the northern suburbs of Charlotte."

The agency argued that it should get a preliminary injunction granted by the court for two reasons,  the first being that they consider the deal "unlawful … because it would result in a combined entity with an eye-popping 64% share of the market in the Eastern Lake Norman Area." 

"The Supreme Court has held that mergers are presumptively unlawful if they result in a single entity controlling a 30% market share," the court document reads.

The second argument the FTC makes for preliminary injunction is that they allege that the planned transaction would remove direct competition between Novant Huntersville and Lake Norman Regional.

"Aggressive competition between Novant Huntersville and Lake Norman Regional benefits patients through lower prices, improved quality of care and new service offerings," the court documents read. "The proposed transaction would immediately wipe out this competition, reducing defendants' incentives to invest in quality and leaving fewer options for patients."

This comes after the FTC filed a lawsuit Jan. 25 against Novant Health over the proposed acquisition. Novant told Becker's at that time that it is committed to delivering the highest-quality, patient-centered, physician-directed care to the communities served by Lake Norman and Davis Regional Medical Centers. 

"As we keep that commitment across North Carolina, including throughout the Greater Charlotte area, we will pursue available legal responses to the FTC's flawed position announced today," a Novant spokesperson told Becker's in January. "We remain confident that Novant Health can bring exceptional care, leading-edge innovation, and long-term stability to Lake Norman and Davis Regional Medical Centers." 

The deal between Novant and Community Health Systems was first announced in March 2023.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars