FTC seeks immediate order blocking Novant-CHS deal

The Federal Trade Commission is asking for an immediate order to block Winston-Salem, N.C.-based Novant Health from acquiring two North Carolina hospitals from Franklin, Tenn.-based Community Health Systems until the 4th Circuit Court of Appeals can rule on its appeal. 

The June 10 request from the FTC comes after a federal judge in North Carolina rejected a request for a preliminary injunction barring Novant from acquiring Lake Norman Regional Medical Center and Statesville, N.C.-based Davis Regional Medical Center in a $320 million deal. The FTC filed a notice of appeal June 9, according to court records. 

The FTC argued in its June 10 motion that "it would be extraordinarily difficult to ‘unscramble the egg' if the proposed transaction is deemed unlawful after defendants have integrated their operations, shared competitively sensitive confidential information and laid off staff."

The commission has argued Novant's acquisition of the hospitals would "irreversibly consolidate the market for hospital services in the Eastern Lake Norman Area in the northern suburbs of Charlotte." After hearing testimony, the judge said he believes the proposed merger "carries at least as much likelihood of competitive benefits as it does competitive harm and the FTC is unlikely to ultimately be successful in proving that the transaction may 'substantially lessen competition.'"

The FTC is seeking a ruling on its motion by noon on June 11. 

Novant told Becker's in a statement, "The FTC's filing is a last-minute attempt, in a long line of attempts over the past year, to prevent this transaction from moving forward." 

"The communities served by Lake Norman and Davis Regional Medical Centers are relying on us to restore the vital healthcare services they've lost — including neonatal intensive care and emergency services," the statement continued. "The federal judge's ruling was clear, and we plan to deliver on the commitments we've made for these hospitals."



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