A U.S. judge in North Carolina has denied the U.S. Federal Trade Commission’s request to block Novant Health’s $320 million acquisition of two hospitals in the state, a deal the agency said would lead to higher prices and reduced innovative care.
U.S. District Judge Kenneth Bell in a 55-page ruling, said the FTC had not met its legal burden for a preliminary order halting the proposed transaction in the Charlotte, North Carolina, area.
Bell said the public’s interest was not “best served” by stopping Novant from buying the hospitals from Community Health Systems while the FTC pursues its antitrust challenge. The proposed merger “carries at least as much likelihood of competitive benefits as it does competitive harm,” the judge wrote.
The FTC declined to comment on Bell’s ruling. Novant chief executive Carl Amato in a statement called the ruling a “victory for the area” and said the court recognized “the additional benefits Novant Health will bring.”
The court’s order allows the deal to move forward, but the FTC, which enforces antitrust law, can still ask an administrative law judge to determine the legality of the proposed transaction.
A hearing is scheduled for June 26, but both sides have asked, for a 30-day continuance to streamline their presentations.
FTC Chair Lina Khan in remarks in February said the Biden administration’s antitrust enforcement agenda had put a focus on healthcare markets.
The agency in January sued Novant, which it said was among the largest hospital systems operating in the southeastern United States and “one of the most expensive” in North Carolina. The company announced its merger plans last year.
Novant’s proposed acquisitions of Lake Norman Regional Medical Center and Davis Regional Medical Center would “significantly increase concentration in an already highly concentrated market,” according to the FTC.
Novant has said it wanted to “acquire and revitalize two struggling hospitals.”
Bell in his order 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 case is Federal Trade Commission v. Novant Health Inc and Community Health Systems Inc, U.S. District Court for the Western District of North Carolina, No. 5:24-cv-00028.
Source: Reuters.com