The Federal Trade Commission's attempt to stop Novant Health's $320 million acquisition of two Community Health Systems hospitals in North Carolina was denied Wednesday by a federal court judge.
Judge Kenneth Bell's ruling against the FTC, which sought a preliminary injunction to halt the sale of Mooresville-based Lake Norman Regional Medical Center and Statesville-based Davis Regional Medical Center, allows the deal to move forward.
Related: Why Community Health Systems isn't ready to buy hospitals
The FTC sued in January to block the deal announced in early 2023, alleging it would harm competition in the market and lead to increased costs. The agency, which requested the preliminary injunction in late March, declined to comment on the ruling.
A Community Health Systems spokesperson said the ruling "confirms the validity" of the proposed transaction.
Bell wrote in the ruling that the benefits of avoiding the pending closure of Davis Regional and adding services at Lake Norman Regional outweighs the FTC's concerns about market competition and lost tax revenue as the hospitals transition to nonprofit ownership.
Carl Armato, president and CEO of Winston-Salem, North Carolina-based Novant, applauded the ruling. "This outcome is a victory for the area, and our plan to deliver on the commitments we've made begins now," he said in a statement.
Franklin, Tennessee-based Community Health Systems has been selling hospitals in recent years to improve its struggling financial performance. The for-profit system sold eight hospitals and its majority interest in another one in 2023. Executives said earlier this year they plan to sell more than $1 billion of facilities over the next few years.
Meanwhile, Novant is looking to expand its footprint. In February, it acquired three South Carolina hospitals in a $2.4 billion deal with Tenet Healthcare, a Dallas-based for-profit system. Nonprofit Novant has 19 hospitals and more than 850 other locations across the Carolinas.
