- The boards of Beaumont Health System, Botsford Health Care and Oakwood Healthcare reached a unanimous agreement to merge in a deal valued at $3.8 billion. The decision comes in the wake of an announcement of intention in March.
- The merger creates the largest combined health system in the Detroit region. The new non-profit is comprised of eight hospitals, 153 patient care sites and in excess of 25,000 employees — although some contractions may be forthcoming.
- Beaumont is the biggest partner in the merger, with a $2.3-billion budget and three hospitals. Oakwood clocks in at second with a $1.2-billion operating budget and four hospitals. Botsford operates one 330-bed hospital and a senior living community.
According to consultant Allan Baumgarten, publisher of Michigan Health Market Review, the new system could control over 30% of the market in three Michigan counties. The system has yet to be named.
The finalization of this deal highlights the importance of culture in successful M&A deals. Last year, Beaumont attempted to merge with another area leader, the seven-hospital Henry Ford Health System. The deal, worth $6.6 billion, disintegrated as a result of Beaumont physician dissatisfaction. Beaumont's doctors are mostly private physicians who practice out of Beaumont hospitals, while Henry Ford's doctors are employed by the hospital system — something other hospitals considering mergers and other affiliations would be wise to consider.