Fairview Health Services and Sanford Health said they have delayed the closing of their merger for an unknown period of time to allow the Minnesota attorney general’s office more time to review the deal.
The announcement by the two systems comes less than two months after announcing that they would delay the merger by two months.
In February, the companies said that they were pushing back the date when their merger would close from March 31 to May 31 after receiving a formal request from Minnesota Attorney General Keith Ellison in January to delay the deal as Ellison’s office weighed whether to contest it.
The merger, which would create a $14 billion system and give Sioux Falls, S.D.-based Sanford access to the metropolitan Minneapolis market, has been subject to scrutiny from the state’s AG office.
A spokesperson from the AG’s office said that it learned last week that Fairview’s leadership had decided to postpone its plans to merge with Sanford, and that the AG’s office would continue investigating the deal in the meantime.
“Although we are still learning the details of Fairview’s plans, we agree that it is imperative for Fairview leadership to focus their attention on the critical issues facing the health system — including its declining financial condition and its relationship with the University of Minnesota,” said John Stiles, deputy chief of staff for the Minnesota AG office.
Fairview owns the University of Minnesota Medical Center and has a partnership with the university. For the nine months ended Sept. 30, Fairview posted a net loss of $486.5 million.
Previously, University of Minnesota Board Chair Ken Powell had “blasted the timeline and process” of the proposed deal, according to the Star Tribune, and reportedly asked the systems to backtrack a statement in which the systems had allegedly said they would complete the deal “with or without the University of Minnesota,” the newspaper reported.
Sanford and Minneapolis-based Fairview said in a joint statement that the systems would delay the merger closing date until after May 31 and would provide a 90-day notice prior to a potential close date.
The state AG’s office has cautioned against a quick merger since the deal was first announced in November. In January, the office said that it would hold public hearings and solicit information to help it consider whether to contest the deal.
“It’s more important to do this right than to do it fast,” John Keller, Minnesota’s chief deputy attorney general, said during one January public hearing on the merger. By that time, the AG’s office had received 3,500 comments on the deal’s impact on Minnesotans.
The merger announcement came almost two years after Sanford and Salt Lake City-based system Intermountain Health called off a merger that would have created a $13 billion system.
If completed, the combined entity will be named Sanford Health and will be headed by current Sanford CEO Bill Gassen. Fairview CEO James Hereferd will serve as co-CEO for a year after the deal closes, according to the system.