FTC Gives Clearance for Merger of Northeast Health, St. Peter’s Health Care Services and Seton Health
Albany, NY, Friday, April 29, 2011 – The Federal Trade Commission (FTC) has completed its review of the merger of Northeast Health, St. Peter’s Health Care Services and Seton Health and decided not to challenge the merger, officials of the three health care organizations announced. The FTC action represents a significant milestone for the final transaction to combine the three organizations.
In letters dated April 27, 2011, to each of the three organizations, the Federal Trade Commission said, “Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, the investigation has been closed.”
Officials from the three organizations said they expect that the transaction to create the new merged health system will now be finalized late this summer. The officials said that work has begun to prepare the legal and financial documents necessary to complete the transaction.
The actual merger transaction later this year will create a new not-for-profit organization to become the “parent corporation” for the Northeast, St. Peter’s and Seton health systems. It will be governed by a board structure with membership drawn from all three organizations. While the new organization will be formed and begin actual operation later this year, full integration may take approximately three years.
The announcement was made at an April 29 press conference that included: Steven Boyle, president, CEO, St. Peter’s Health Care Services; James Reed, M.D., president & CEO, Northeast Health; and Scott St. George, interim president & CEO, Seton Health.
“The FTC’s decision represents the last major regulatory process that needed to be concluded for us to complete the affiliation we first announced in February 2009,” said Boyle. “The FTC review follows a similarly exhaustive self-examination or ‘due diligence’ which the organizations completed before signing the Affiliation Agreement, and which found that a merger of the organizations is in the best interest of the communities served by the institutions.”
The FTC began its review in June 2010, after the formal Affiliation Agreement was signed. The FTC decision means that the three organizations can now begin a final Planning and Integration Process that will bring the Affiliation Agreement and a conceptual design of the new health system to an operational level.
All four acute care hospitals will continue to operate under the proposed plan, as will Sunnyview Rehabilitation Hospital in Schenectady. While the new corporation is expected to be formally created this summer, it could take as many as three years for the new health care system to complete many of the changes and to fully integrate the three current health systems.
Top leaders of the new company will include Steven P. Boyle, president, CEO of St. Peter’s Health Care Services, who will be CEO of the new organization; and James Reed, M.D., currently president & CEO of Northeast Health, who will be the President of the new company. Both will report directly to the new Board of Trustees.
This new company, with nearly 12,000 employees in more than 125 locations, will be a member of Catholic Health East, the current parent corporation of St. Peter's Health Care Services, and will abide by the Ethical and Religious Directives of the Catholic Church. However, the new company will not be a Catholic entity. St. Peter’s and Seton will retain their Catholic identities and Northeast Health will remain a secular organization.
“We are thrilled at the progress that has been made to date in bringing these three fine organizations together,” said Judy Persichilli, president and chief executive officer of Catholic Health East. “We look forward to completing the integration process, and building upon our complementary strengths so that we can better meet the health care needs of our communities in the future.”