Community Health to buy Health Management in $7.6 billion deal
Community Health Systems said Tuesday it would buy Health Management Associates in a deal valued at about $7.6 billion, including about $3.7 billion in debt, that will result in Community Health owning more than 200 U.S. hospitals.
CNBC reported on Monday that a deal was imminent.
In a statement, Community Health said the hospital system would purchase all of Health Management's outstanding common stock for a combination of cash and Community Health stock valued at $13.78 per Health Management share.
Health Management's shareholders will own a 16 percent stake in the combined company once the deal closes.
The boards of both companies approved the merger in unanimous votes, the company said.
Community Health is the second largest for-profit hospital chain in the country.
Health Management had been under pressure from an ongoing federal investigation over its admission practices, and one of its largest shareholders was pressing the company to replace its board.
The deal is expected to close by the end of the first quarter of 2014 and will need to win the votes of 70 percent of Health Management's shareholders as well as clear regulatory hurdles.
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