Hackensack Meridian, Englewood Health call off merger after legal and regulatory roadblocks

Hackensack Meridian Health and Englewood Health have given up their fight against the Federal Trade Commission (FTC) and dropped their plans for a merger.

The proposed deal, first announced in late 2019, would have placed three of Bergen County, New Jersey’s six inpatient general acute care hospitals under the control of the state’s largest healthcare system.

At the time of its announcement, Hackensack Meridian Health said it would invest over $400 million into Englewood Health to make it a tertiary academic hub for the region.

The FTC's successful resistance to the merger could impact further hospital consolidation, as other organizations might consider the likely objections to potential merger plans. 

The boards of Englewood Healthcare Foundation, which owns the Englewood hospital, and Hackensack Meridian Health each voted at the end of March to terminate the merger agreement. The organizations then notified the FTC April 5 that they had "jointly agreed to terminate their merger agreement and abandoned" Hackensack Meridian Health's proposed acquisition of Englewood.

"We firmly believe this merger was in the best interest of our patients and the community at large. Given the Appellate Court's decision, the board and leadership of Hackensack Meridian Health have decided not to pursue the merger," a spokesperson at Hackensack Meridian Health said in an emailed statement.

The FTC launched legal proceedings in late 2020 to block the merger, arguing that it would eliminate competition in New Jersey’s most populous county, allow the larger system to increase rates and remove incentives to improve quality of care.






The FTC scored a win last August when a U.S. district court granted its preliminary injunction. The health systems filed their appeal later that month, arguing that their merger would open the door for more investments into community programs, care coordination across the larger health system, expanded care capabilities and various cost efficiencies.

The regulator’s stance was also backed by a coalition of 25 state attorneys general who in November filed an amicus brief urging the appellate court to maintain the injunction. The state prosecutors said at the time that the courts’ decisions were “critical” in preserving antitrust law enforcement of for-profit hospital deals such as these.

“Mergers increasing the bargaining power of large healthcare systems result in higher prices without any substantial improvements in quality for consumers,” they wrote in the brief," the attorneys general wrote

The proposed merger was dealt another blow last month when a U.S. Court of Appeals panel sided with the FTC and upheld last year’s U.S. district court decision that granted the FTC a preliminary injunction to block the merger.

In line with the regulator and the lower court, a four-judge panel of the U.S. Circuit Court of Appeals for the Third Circuit said the proposed merger “is likely to substantially lessen competition” in Bergen County, New Jersey.







Englewood Health executives issued a statement in late March after the appellate court decision.

"Although this is not the decision we had hoped for, we entered merger planning from a position of strength. Englewood Health continues to thrive and remains strong. The goal of the planned merger had always been to improve health care for the communities we serve. This goal has not changed. Englewood Health will continue to move forward with our strategic plan, enhancing our services and improving access for patients and communities across northern New Jersey," the health system said in a statement.

Edison, New Jersey-based Hackensack Meridian Health comprises 17 hospitals, staffs more than 36,000 employees and reported $6.9 billion in operating revenue during 2020.

Englewood Health comprises the 352-bed Englewood Hospital, its physician network and a charitable foundation. The organization staffs nearly 3,800 employees and reported $818.6 million in total revenue during 2020.

Notably, increased merger and acquisition scrutiny from the FTC and the Department of Justice has picked up substantial support from the White House. Last summer, President Joe Biden issued a sweeping executive order tasking the agencies to take a closer look at healthcare mergers “to ensure patients are not harmed” by increased consolidation across the provider landscape.