MINNEAPOLIS—Sanford Health, a South Dakota health system on an acquisition streak, called off merger talks with Minneapolis-based Fairview Health Services after the deal met resistance from Minnesota officials. Sanford CEO Kelby Krabbenhoft said in a statement that the health system appears to be “unwelcome by some interested parties and key stakeholders of our proposed merger partner,” and without their support a merger proposal would be “inconceivable and unacceptable.” Krabbenhoft specifically said no deal would proceed without a “positive understanding” from Minnesota Attorney General Lori Swanson. The deal, which was made public in March, could have combined Fairview's six Minnesota hospitals and 33 hospitals owned, leased or managed by Sanford Health. In March, Swanson alerted Fairview her office was “troubled” by private negotiations over the health system's assets, including the University of Minnesota's teaching hospital. Swanson scheduled public hearings on the merger. Chuck Mooty, Fairview's interim CEO, said the health system would halt evaluation of a deal with Sanford. “We understand why they would choose to step back at this time, but the news comes as a disappointment,” he said in a statement. Mooty also said Fairview would not entertain a proposal from the University of Minnesota to acquire Fairview and instead enter talks to strengthen its relationship with the university. “Clearly, we need to ensure strategic alignment between us before we can advance new ideas for the future,” Mooty said.
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