Fairview, Sanford call off planned merger

Eight months after announcing their intention to combine operations, the merger between Fairview Health Services and Sanford Health appears to be off.

Minneapolis-based Fairview confirmed Thursday that it is ending the merger process with the Sioux Falls, South Dakota-based health system.

“Our aligned missions, our shared commitment to health and healing, and our deep roots in our communities positioned us well to transform the future of healthcare,” Fairview President and CEO James Hereford said in an announcement. “However, without support for this transaction from certain stakeholders, we have determined it is in the best interest of Fairview Health Services to discontinue the merger process.”

The announcement comes after multiple delays by the companies amid protests from medical professionals, students and community members, as well as a review from the Minnesota Attorney General’s Office. In their most recent delay in April, Fairview still expressed confidence the deal would get done and was in the best interests of all parties.

Sanford President and CEO Bill Gassen said in a statement that the health care system “exhaust[ed] all potential pathways to completing our proposed merger” but there wasn’t enough support from Minnesota to go through with the deal.

“This is the right decision for our patients and residents, our people and the communities we serve,” Gassen said. “We remain committed to providing world-class care to patients across our footprint. We are extremely grateful for the support we have received from many Minnesotans who share our vision to invest in health care delivery and enhance access to care in both rural and urban areas.”

Fairview runs 11 hospitals and employs 31,000 people while Sanford has 47 hospitals and 48,000 employees. Under their plan, the new company would’ve operated out of Sioux Falls.

“While we wish the outcome were different, we know that the best thing for our patients, our people and the communities we serve is to continue our focus on delivering world class care, now and into the future,” Hereford said.

Since the companies’ initial announcement back in November, the plan was met by skepticism and criticism.

Minnesota Attorney General Keith Ellison’s office scheduled four community meetings around the state, often drawing large crowds, to get input from Minnesotans about the proposal.

It also led the University of Minnesota to re-evaluate its partnership with Fairview as concerns arose about the possibility of the university’s health care facilities being controlled by an out-of-state entity. In fact, that led state lawmakers to pass a bill this spring to prevent that very scenario unless the attorney general deemed it to be in the public interest.

Still, that didn’t kill the deal or even appear to put a damper on the companies’ plan. In late May, Fairview released a statement saying in part, “This new law does not change our desire to combine with Sanford Health.”

The U of M had requested nearly $1 billion from the state to buy back their health care facilities on the Twin Cities campus and build a new hospital, something the CEOs of Fairview and Sanford expressed support for.

The top executives also testified before Minnesota lawmakers, who seemed skeptical of the plan and questioned the companies’ desire to complete the merger quickly.

After initially setting a self-imposed deadline of March 31, the companies in February agreed to push that to May 31. Then in April, as calls from lawmakers and other stakeholders continued to urge them to slow down, the companies agreed to push the closing date until mid-summer at the earliest. However, it’s unclear what specifically caused the deal to fall apart since then. However, a Sanford spokesperson told 5 EYEWITNESS NEWS it was them who initiated the decision to end the merger.

Ellison released the following statement Thursday afternoon:

“Fairview and Sanford have made the decision they have determined is right for them. In my office’s ongoing investigation, we have done significant work to evaluate the proposed merger’s compliance with state and federal laws and whether it is in the public interest, including reviewing more than 300,000 pages of documents. We know the proposed merger has been of vital interest to Minnesotans as well: our investigation received more than 6,000 comments from Minnesotans about it, including at four well-attended public meetings across the state. While this merger will not be going forward, the health and future of Fairview, the University of Minnesota healthcare facilities, and all Minnesota health systems are of vital interest to all Minnesotans. Much work remains to be done.”

Minnesota Attorney General Keith Ellison