ChristianaCare Health System and Prospect Medical Holdings have called off negotiations surrounding the purchase of Crozer Health, the organizations disclosed last week.
The Wilmington, Delaware-based system had sought to bolster its services in southeast Pennsylvania and announced in February that it had entered talks with Prospect for a potential acquisition.
“Since the signing of the [letter of interest] in February, the economic landscape has significantly changed, impacting the ability of the sale to move forward,” the companies said in a statement.
“Both organizations worked very hard to reach a final agreement and have significant respect for each other, and remain committed to caring for the health of those in Delaware County, [Pennsylvania],” they said.
Crozer Health was formed in 1990 with the merger of Crozer-Chester Medical Center and Delaware County Memorial Hospital and has since swelled to include two more hospitals and a total of 4,000 employees. It was acquired by Prospect in 2016.
ChristianaCare is a nonprofit teaching system that runs three hospitals and a network of other services including primary care, urgent care and outpatient services.
ChristianaCare planned to return Crozer to its nonprofit status if the proposed deal—which also included other assets such as real estate, a medical group and ancillary outpatient services—had closed.
Prospect owns and operates 17 hospitals as well as over 165 clinics and outpatient centers across California, Connecticut, Pennsylvania, Rhode Island and Texas.
Prospect had announced the now-nixed Crozer Health deal alongside another sell-off agreement for two Connecticut health systems to Yale New Haven Health. That transaction is still on the books to close before the end of the year pending regulatory approvals.