Atrium Health has suspended merger negotiations with UNC Health Care after the two systems failed to reach an agreement on a deal announced last year.
Atrium, formerly known as Carolinas HealthCare System, notified UNC in a letter sent Friday that it was suspending the talks, the health system said in a statement. Atrium CEO Gene Woods and board chair Ed Brown said that though the two systems couldn't agree, "our respect for UNC HealthCare ... has grown through this process."
"Atrium Health is committed to the patients and communities of North Carolina more than ever and remains committed to creating an organization that will serve more people in better ways and enhancing our ability to address our state’s most pressing issues including rural care, behavioral health and affordability," the system said.
RELATED: 13 healthcare M&A deals that made headlines in 2017
UNC said in a statement that the two systems determined that "we cannot satisfy our mutual organizational goals through a proposed partnership and joint operating company." A more beneficial course of action, according to the statement, is to move forward intending to work together on initiatives.
"Though we will not form a joint operating company, UNC Health Care and Atrium Health will continue to partner on important issues such as improving rural healthcare and expanding medical education," UNC said.
The merger was announced last summer, and the two systems intended to be operating as a joint entity by the end of 2017. The deal would have formed one of the nation's largest nonprofit health systems. But the merger stalled after UNC's CEO said the two sides were stuck on leadership issues.
Woods was set to become the new joint entity's CEO, while UNC Health Care CEO William Roper would become chairman of the board. After Roper's term ended, someone from Atrium would chair the board, but the two sides were struggling to reach an agreement on how long the terms would be.
Roper echoed those concerns Thursday in an interview with WUNC, North Carolina's public radio station.
"These are big issues around how the most crucial decisions are going to be made," Roper said. "And if we can find ways to be mutually comfortable on this, we are going to have an agreement. And if we can't, we won't."
The state's attorney general had also requested additional information on the merger earlier this month to ensure it would not harm healthcare competition for patients in North Carolina.
Amid its ongoing merger talks with UNC, Atrium announced last month that it would merge with Georgia-based Navicent Health.