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US hospitals cancel $320M deal after FTC court victory


US hospitals cancel $320M deal FTC court victory

Due to a court-ordered pause on the transaction, Novant Health has decided to withdraw from its $320 million deal to acquire two hospitals in North Carolina from Community Health Systems.

The 4th U.S. Circuit Court of Appeals in Richmond, Virginia, has stopped a transaction. They sided with the Federal Trade Commission and put a hold on the acquisition. The FTC is appealing a lower court's decision that allowed the acquisition to continue.

Novant, a company based in Winston-Salem, North Carolina, has decided not to buy the two hospitals in the Charlotte region. The firm believes that the facilities and their patients would have greatly benefited from joining Novant Health. However, they were unable to complete the transaction because of obstacles from the FTC.

The FTC, attorneys, or representatives of Community Health Systems, located in Franklin, Tennessee, did not respond to requests for comment. The FTC filed a lawsuit in January to stop the merger because they believe it would lead to less innovative treatment and higher prices. The public interest was not "best served" by halting Novant's proposed deal, according to U.S. District Judge Kenneth Bell in Charlotte, who sided with the hospital firms.

The judge said the merger could bring as many benefits as drawbacks. The FTC requested that the transaction be put on hold while it challenged Bell's order to the 4th Circuit. According to FTC Chair Lina Khan, the Biden administration's antitrust enforcement program places a high priority on the healthcare sector. On July 26, there will be a hearing in the agency's administrative case against the hospital arrangement.

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