(WBIR-Knoxville) A Franklin, Tennessee hospital operating company announced Tuesday plans to buy Tennova hospitals parent company Health Management Associates, Inc. (HMA.)
The Middle Tennessee company, Community Health Systems, Inc. (CHS,) will pay around $7.6 billion for HMA according to a press release. The purchase includes taking on HMA's approximately $3.7 billion of debt.
HMA has operated the hospitals and clinics as the Tennova East Tennessee system since 2011 when it announced the purchase of healthcare provider Mercy.
Mercy Hospitals was formed when the former Baptist and St. Mary's hospital systems merged in 2008.
After the HMA purchase, CHS will have 206 hospitals in 29 states with a total of 31,00 beds.
The purchase is expected to be complete by the end of the first quarter of 2014 and is subject to HMA's stockholders approval and federal conditions.
In a statement, CHS Vice President of Corporate Communications Tomi Galin said, "We are very excited about the opportunity to be a part of the Knoxville community and to support the physicians and employees at Tennova in their commitment to deliver high-quality patient care. Tennova is a great system of hospitals and we appreciate their history and the services they provide for local residents. We really look forward to getting to know the team at Tennova and to understanding the unique opportunities to advance healthcare services across Knoxville.
Today's announcement is just the first step in a long process to complete the acquisition of HMA. That process will likely be completed during the first quarter of 2014. It is too early to discuss any possible changes that could occur after the transaction closes; right now we are focused on the benefits of combining two quality focused organizations and the positive impact we believe this transaction will have for all the communities we serve."
Tomi Galin | Vice President |Corporate Communications | Community Health Systems
The Associated Press
Community Health Systems plans to buy fellow hospital operator Health Management Associates for about $3.9 billion in a deal that it says will leave it well positioned to benefit from the health care overhaul.
The Franklin, Tenn., company says it will pay a combination of cash and stock valued at $13.78 for each share of Health Management Associates Inc., or HMA.
That represents a drop of more than 7 percent from HMA's closing price Monday of $14.92.HMA shares fell 5.3 percent, or 79 cents, to $14.13 in pre-market trading.
The board members of both companies have approved the deal, but HMA stockholders still have to clear it.
The health care overhaul is expected to help hospitals as it expands insurance coverage to millions of people over the next few years.
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