The merger between Fairview Health Services and Sanford Health was called off after Sanford announced on July 27 that it was discontinuing the process. The transaction would have led to the combination of two of the largest not-for-profit senior living operators in the country, Evangelical Lutheran Good Samaritan Society (whose parent organization is Sanford) and Ebenezer (which is a subsidiary of Fairview). Sanford owns more than 200 Good Samaritan locations, and Minnesota-based Fairview has more than 90 senior living locations managed by Ebenezer. The combined entity would have owned 58 hospitals, as well.
Announced in late 2022, the merger was expected to be completed in March 2023, but regulatory delays pushed closing back. A new law passed by Minnesota legislators and the governor would give the attorney general more control over unwinding any healthcare transactions that would hinder the University of Minnesota’s hospitals, which were acquired by Fairview in 1997, from pursuing their public care mission or put the school under ownership of a for-profit or out-of-state entity, like South Dakota-based Sanford Health. Numerous labor groups also opposed the merger, highlighting the mounting pushback against the deal.
Fairview’s financial struggles suggest that the health system may continue to look for other merger opportunities with larger, more financially sound partners. In 2022, the company recorded a net operating loss of $315 million, up from a loss of $133 million in 2021.
