A merger linking two of the largest hospitals in the San Francisco Bay Area is on hold until late October.
The potential merger partners-555-bed Alta Bates Medical Center in Berkeley, Calif., and 420-bed Summit Medical Center in Oakland, Calif.-and the California attorney general's office last week agreed to a compromise that eliminates the state's need to get a temporary restraining order to block the merger.
Attorney General Bill Lockyer filed a federal antitrust lawsuit against Alta Bates and Summit Aug. 10 in U.S. District Court in Oakland. Along with it, he filed a motion for a temporary restraining order to stop the deal, which was slated to close Aug. 11.
The hospitals initially agreed to a one-week delay but later agreed to wait until the court rules on the state's motion for a preliminary injunction to stop the deal (Aug. 16, p. 2). The court has scheduled an Oct. 25 hearing on the preliminary injunction motion.
Alta Bates' parent corporation, Sacramento, Calif.-based Sutter Health, wants to buy Summit and merge its operations with those of nearby Alta Bates.
After participating in a joint antitrust investigation of the sale, the Federal Trade Commission cleared the sale in July. However, the state believes the deal is anti-competitive.
In its complaint against the hospitals, the state said an Alta Bates-Summit merger would violate the Clayton Act, which prohibits mergers that lessen competition or create a monopoly.
Citing a "sense of urgency" regarding the hospitals' financial situation, Sutter spokesman Bill Gleeson said Sutter is pleased that a "time line" for the legal battle is now in place.
The case has been assigned to U.S. District Judge Maxine Chesney, said Sandra Michioku, a spokeswoman for the attorney general.