CHS-HMA merger creates healthcare behemoth
Community Health Systems, Inc. completed its $7.6 billion acquisition of Health Management Associates on Monday. The Franklin, Tenn.-based hospital chain is now the largest in the country, measured by sheer number of facilities owned and operated.
CHS now owns, leases or operates 206 hospitals in 29 states, with approximately 31,000 licensed beds.
On Jan. 24, the Federal Trade Commission approved the merger, after demanding that CHS divest two outpatient hospital facilities, currently subsidiaries of HMA, within six months after FTC approval of the deal.
HMA stock has ceased trading on the New York Stock Exchange. HMA shareholders received $10.50 per share in cash plus 0.06942 shares of CHS common stock for each HMA share they own. As of Tuesday afternoon, CHS stock was trading at $41.35 per share on the NYSE.
According to CHS, HMA shareholders will also receive one Contingent Value Right for each HMA share they own, which could yield additional cash consideration of up to $1.00 per share.
Facilities that compete with CHS facilities in various communities are certain to be challenged by the company’s scale and resulting ability to generate efficiencies, particularly in the realm of population health management.
In a slight bit of understatement while announcing the transaction, Wayne Smith, CHS chairman and CEO, said the deal “provides us with increased scale and broader geographic reach…We look forward to effectively integrating this acquisition and generating significant value for our shareholders.”
Distinct emphasis on the latter, I'd say.
