A US District Court judge has opposed a request from the Federal Trade Commission (FTC) to block Novant Health’s acquisition of two hospitals in North Carolina from Community Health Systems (CHS).
The FTC’s attempt to halt the $320m deal on antitrust grounds was denied, with the court ruling that stopping the transaction would not serve the public interest.
Go deeper with GlobalData
In January this year, the FTC filed a lawsuit against Novant Health, challenging its proposed purchase of the Lake Norman Regional Medical Center and Davis Regional Medical Center from CHS.
Since being announced last year, the deal had faced scrutiny over concerns of increased market concentration and potential negative impacts on healthcare costs and innovation.
The FTC’s lawsuit against the healthcare system was also supported by the North Carolina State Treasurer Dale Folwell, who filed a ‘friend of the court’ brief in April, asking the court to halt Novant Health’s planned acquisition.
Despite the FTC’s concerns, on 5 June, Judge Kenneth Bell of the US District Court for the Western District of North Carolina ruled that the FTC had not met the legal standard for a preliminary injunction.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIn his 55-page ruling, Judge Bell said the court ‘may not simply rubber stamp the FTC’s request for an injunction upon the showing of a mere possibility that the antitrust laws will be violated’.
The order stated: “Overall, the public interest is best served by Novant being permitted to own and operate (Lake Norman Regional Medical Center) and (Davis Regional Medical Center), pending the conclusion of the FTC administrative process.”
According to a Reuters report, Novant Health CEO Carl Amato welcomed the decision, saying the court ‘recognised the additional benefits Novant Health will bring’.
While the court’s order allows the deal to proceed, the FTC still has the option to seek a legal determination from an administrative law judge.
