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FTC approves CHS-HMA deal, with conditions

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The Federal Trade Commission has OK'd the proposed Community Health Systems Inc. acquisition of Health Management Associates Inc. — but not without conditions.

Under the terms of the agreement, CHS is required to divest two acute-care facilities and related outpatient businesses currently owned by subsidiaries of HMA: Riverview Regional Medical Center, a 281-bed hospital located in Gadsden, Ala.; and Carolina Pines Regional Medical Center, a 116-bed hospital in Hartsville, S.C.

HMA, based in Florida, operates 71 hospitals in 15 states, including three local facilities: Carlisle Regional Medical Center, Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center.

CHS, based in Tennessee, owns, leases or operates 135 hospitals in 29 states, including one local facility, Memorial Hospital in York.

The proposal was approved by HMA shareholders a few weeks ago, and the companies said they expect the deal to close by the end of the month. CHS will acquire each issued and outstanding share of the common stock of HMA for $10.50 in cash, 0.06942 of a share of CHS common stock, and a contingent value right, which could yield additional cash consideration of up to $1 per share, depending on the outcome of certain litigation matters.

CHS said it does not expect the required divestitures to have a meaningful impact on the combined company’s financial operations or cost-savings. The completion of the HMA acquisition is not contingent on the immediate divestiture of these facilities, but the divestitures are required to be completed no later than six months after the FTC’s order is issued.

Approval for the CHS acquisition of HMA has also been received from the West Virginia Health Care Authority with respect to HMA’s facility in Williamson, W.Va.

CHS and HMA are listed for trading on the New York Stock Exchange under the symbols CYH and HMA.

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