US-based healthcare services provider Novant Health has called off its previously announced $320m deal to acquire two hospitals in North Carolina, US from Community Health Systems (CHS). 

The deal, announced in March last year, involved the 123-bed Lake Norman acute care hospital in Mooresville and the Davis Regional Medical Center in Statesville, which is transitioning to an inpatient behavioural health hospital.  

However, the transaction faced opposition due to concerns over market concentration. 

The latest announcement comes after the proposed acquisition was blocked by the Fourth US Circuit Court of Appeals.  

On 18 June, the Richmond, Virginia-based court ruled 2-1 to suspend the deal. 

The court said: “The district court found that the proposed transaction (which the FTC seeks to block) will revitalise the Davis hospital and enhance competition between Novant and Atrium.  

“Indeed, the district found that, without the transaction, Lake Norman Regional’s ‘future is decidedly uncertain’ as well.”  

The Fourth US Circuit Court of Appeals’ ruling comes in response to the US Federal Trade Commission’s (FTC) recent decision to challenge a lower court's ruling that had allowed the acquisition to proceed. 

The US FTC filed a lawsuit in January 2024 to restrict this deal, arguing that the merger would lead to higher prices and reduced quality of care.  

Earlier on 5 June, US District Judge Kenneth Bell in Charlotte had ruled that the public interest was not "best served" by halting the deal, suggesting it could bring as many competitive benefits as harms. 

Following this decision, Novant stated it would abandon its plans to purchase the two hospitals. 

Reuters cited Novant Health’s statement: “We are steadfast in our belief that these facilities and their patients would have greatly benefited from joining Novant Health, but with the FTC’s continued roadblocks we do not see a way to finalise this transaction.” 

The report highlighted that FTC Chair Lina Khan has emphasised that healthcare markets are a focus for antitrust enforcement under the Biden administration.  

The administrative case against the hospital deal was scheduled for a hearing on 26 July, but the future of the transaction now remains “uncertain” as the FTC and representatives for CHS have not provided comments on the recent developments.