California-based Sutter Health and Minnesota-based Allina Health have signed a definitive agreement to form a $26 billion not-for-profit health system with a network of nearly 40 hospitals. Under the terms of the merger, Allina will join Sutter Health and become the Upper Midwest Division of Sutter Health, maintaining the Allina Health name, brand and regional headquarters in Minneapolis. Sutter Health would maintain its headquarters in Northern California.
Sutter is a huge health system in its own right, operating 27 hospitals and generating nearly $20 billion in total revenue in 2025. Allina Health is a nonprofit health care system serving Minnesota and western Wisconsin through a network of more than 90 clinics, 12 hospital campuses, 13 retail pharmacies, specialty care centers, home care and emergency medical transportation. According to its most recent financial report released in September 2025, the organization generated more than $5 billion in patient services revenue in 2024.
Allina hasn’t announced a deal in the healthcare M&A space since 2022, when it added Interlude Restorative Suites, a 50-bed inpatient rehabilitation hospital. Sutter, on the other hand, has been much more active. Its most recent deal was announced in December 2025, when it purchased Cal Sports & Orthopaedic Institute, a physician group in California.
The combined organization would also have more than 400 primary and specialty care sites and 18,000 physicians. The two systems plan to invest $2 billion in Minnesota and western Wisconsin, focusing on developing patient engagement tools, physician recruitment and AI initiatives to help streamline operations.
It’s been years since we’ve seen a health system merger this large. The most recent was the 2024 merger of Lehigh Valley Health Network and Jefferson Health System, which created a system with more than $14 billion in combined revenue.
Next, Sutter and Allina will collaborate with the appropriate state and federal agencies to proceed through the regulatory review process. The transaction is expected to close by the end of 2026, pending regulatory review.
