Maybe the third time’s a charm? After striking out on two potential mergers over the past three years, Sanford Health has signed a letter of intent with Fairview Health Services to combine and create a new health system. The deal is still in the negotiation phase and needs a green light from regulators, but the two organizations expect the deal to close in 2023.
If Sanford Health and Fairview cross the finish line, the merger will create a wide-reaching health system in the midwest with a combined $14 billion in annual revenue. Sanford Health has 47 medical centers and more than 200 Good Samaritan Society senior care locations. With the addition of Fairview, it will gain 11 hospitals, including several in the Minneapolis metro area, a new market for Sanford Health. Fairview also owns more than 80 primary and specialty care clinics, 36 retail and specialty pharmacies, rehabilitation centers, a physician network, senior care housing and long-term care facilities and medical transportation.
Fairview’s senior care brand, Ebenezer Senior Living, operates about 250 skilled beds across five campuses.
Sanford Health CEO Bill Gassen will serve as president and CEO of the combined system, and Fairview Health Services CEO James Hereford will serve as co-CEO for one year post-closing. Sanford Health and Fairview Health Services will remain nonprofit entities, each with its regional presence, leadership and regional boards in the markets they serve. Upon the transaction’s close, the parent company’s name will be Sanford Health.
In 2020, Sanford Health and Intermountain Healthcare called off merger talks shortly after the longtime president and chief executive of Sanford Kelby Krabbenhoft left the company in a swirl of controversy.
And before that, in 2019, Sanford Health and Iowa-based UnityPoint Health walked away from a potential merger after the two organizations failed to agree on deal terms.
We’ll see if Sanford Health and Fairview can survive the negotiation phase. Although Sanford and Fairview are confident regulators will approve the deal since there isn’t a significant overlap in market geography between the two, the Federal Trade Commission and Justice Department have been much more critical in recent years of large mergers such as this. Keep an eye on this one.
