Beaumont, Spectrum health systems say merger delayed by overburdened regulators


The merger of Beaumont Health and Spectrum Health will not close this fall as originally planned, the two companies told Crain’s in a statement.

In a joint statement Friday, Beaumont Health and Spectrum Health said the organizations are cooperating with federal and state regulators reviewing the planner merger, which would create a $12 billion, 22-hospital system, but that review is taking longer than originally anticipated.

“The Federal Trade Commission (FTC) is experiencing a surge in filings across all industries and will take longer than originally anticipated to review the BHSH filing,” the two health systems said in an emailed statement.

“We are eager to launch our new health system as soon as possible, but recognize this will likely be beyond the fall,” Mark Geary, Beaumont’s head of communications, told Crain’s in a text message clarifying the merger closing date.

It remains unclear whether the deal will close in December or after the New Year.

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“The two health systems are currently responding to a request for additional information from the FTC, which the organizations understand has become increasingly common,” the organizations said in the statement.

Last month, lawyers from the FTC were meeting with large employers and other stakeholders who may have reason to oppose the merger, Crain’s reported. The process is part of the FTC’s deeper review, called a “second request,” that seeks more information from the parties and outside stakeholders.

The FTC is seeking to determine whether the proposed deal — which would create the state’s largest employer and healthcare system with 64,000 employees — reduces healthcare competition locally.

However, the review does not indicate whether the FTC may take any action to halt or modify the merger.

The Grand Rapids- and Southfield-based health systems signed an integration agreement earlier this month and are now in the integration planning stages, the companies said in the statement.

” … pre-integration planning is now underway, which is permissible under regulatory guidelines, and will not be implemented until closing,” the organizations said. “The two organizations are beginning to identify representatives to start collaborating on ways to successfully launch the new health system …”

If and when the merger is finalized, the combining of Beaumont and Spectrum would create the largest healthcare footprint in the state.

Spectrum reported $8.3 billion in revenue in 2020, compared to Beaumont’s $4 billion. Livonia-based Trinity Health is larger, but its Michigan operations are much smaller.

Spectrum President and CEO Tina Freese Decker would serve as the top executive for the new company. John Fox, the embattled president and CEO of Beaumont, would assist in the transition then depart the company.

The new system, with a temporary legal name of BHSH System, would have a dual headquarters in Grand Rapids and Southfield.


Source: modernhealthcare.com

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