Statesboro’s East Georgia Regional Medical Center is set to become part of an even larger hospital chain than the one it is in now.
Community Health Systems Inc. announced Tuesday that the company has entered into a merger agreement with Health Management Associates Inc., East Georgia’s parent company, for approximately $3.9 billion — $7.6 billion counting assumed debt.
When the deal is complete, Community Health Systems would own or operate approximately 206 hospitals in 29 states, with a total bed count of more than 31,000, according to a news release issued by the company.
“This compelling transaction provides a strategic opportunity to form a larger company with a diverse portfolio of hospitals that is well-positioned to realize the benefits of health care reform and to address the changing dynamics of our industry,” said Wayne T. Smith, the chairman, president and CEO of Community Health Systems, in the release. “Our complementary markets and the ability to form networks in key states, along with the synergies that will be available to us, can create value for the shareholders of our companies, the communities we serve, our employees and medical staffs. We look forward to working with the physicians and employees of HMA to advance the commitment shared across both organizations to pursue clinical excellence and to deliver quality care for patients.”
The proposed acquisition would unite five Georgia hospitals as part of the large new chain. Tennessee-based Community Health Systems operates two hospitals in Georgia: Fannin Regional Hospital in Blue Ridge and Trinity Hospital of Augusta. HMA currently has three hospitals in Georgia: Barrow Regional Medical Center in Winder; Clearview Regional Medical Center in Monroe; and East Georgia Regional Medical Center.
The merger agreement was unanimously approved by the boards for both Community Health Services and HMA. HMA’s board also recommended that its shareholders approve the merger.
East Georgia Regional CEO Bob Bigley said he believes the acquisition is a positive change.
“It is not an uncommon thing in our industry to have these things happen. I, personally, am excited about the move. I think it is a great opportunity for both companies,” Bigley said. “I think Community Health Systems is a very good company, and Health Management Associates, I know, is a great company. Together, we are probably a better company and will have better opportunities.”
Regarding any changes to the hospital, as a result of a merger, Bigley said: “For East Georgia, it will be business as usual. We will still be adding new services and adding more doctors. Nothing will change here.”
The deal reflects a growing number of hospital consolidations across the nation, ignited, in part, by the health reform law of 2010, according to a Georgia Health News report.
Both companies expect the deal to close next spring, pending antitrust clearance and 70 percent of HMA shares being voted in favor.
HMA shares sank almost 11 percent, or $1.62, to $13.30 in trading Tuesday — the day the pending merger was announced — before climbing back to $13.48 Wednesday.
The stock had climbed more than 60 percent this year as of Monday, when it closed at $14.92.
Community Health shares fell $1.65, or 3.5 percent, to $45.58 in trading Tuesday, and increased to $46.06 by close Wednesday
Jeff Harrison may be reached at (912) 489-9454.