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N.C. attorney general won't object to Novant acquiring New Hanover health-care system

N.C. attorney general won't object to Novant acquiring New Hanover health-care system


The state's attorney general said Thursday he will not object to Novant Health Inc.'s $5.3 billion acquisition of New Hanover Regional Medical Center.

The anti-trust approval is expected to be the final regulatory step on the transaction.

Novant received final approval Oct. 5 by a 4-1 New Hanover Board of Commissioners vote to acquire the 59-year-old health-care system through an asset purchase.

Novant said in October it projected gaining the approval of Attorney General Josh Stine could take until June 30.

Carl Armato, Novant's president and chief executive, said in a statement that "we look forward to closing on this partnership as soon as possible."

State law provides that when a county sells a hospital, six essential protections must be maintained for the benefit of customers in the future. 

Stein said that in order to gain his approval, Novant and New Hanover agreed to increase the new endowment’s transparency, its accountability to the public, and the representativeness and independence of its board of directors.

Novant agreed in October to pay $1.5 billion at closing; $2.5 billion toward “strategic capital expenditures;” $600 million to routine capital expenditures; a $150 million contribution by the hospital; and $50 million to the hospital’s foundation.

"Negotiations also resulted in stronger commitments by Novant/NHRMC to continue to provide critical medical services to the people of New Hanover County and the region," according to the statement from the attorney general's office.

"Because of these negotiated improvements, because the transaction satisfies the requirements established by state law, and because the sales price was fair, Attorney General Stein will not take action to seek to block the deal."

Stein said he is aware of the community impact involved when one health care system acquires another.

"I have real concerns about what this means for the future of health care in North Carolina," Stein said.

"Right now, my office has limited authority when conducting reviews of this nature. State law does not grant my office a discretionary approval right."

As such, Stein said he would be interested in talking with state legislative leaders "to determine whether or not North Carolinians would be better served by a more comprehensive system of review that could scrutinize further conglomeration of health care systems."


Novant is attempting to establish a third flagship hospital in North Carolina, in addition to hubs in the Triad and Charlotte.

Novant already operates Brunswick Medical Center in the nearby town of Bolivia, where it opened a $100 million, 78-bed community hospital in July 2011.

Novant would become southeastern North Carolina's dominant health-care provider.

Armato has said Novant and the Wilmington hospital “are natural partners with aligned values and not-for-profit charitable missions.”

"Novant has recognized, now more than ever, that health-care organizations really must do all they can to ensure stability, encourage innovation, expand access to care that communities need to stay healthy," Armato said.

"We believe this partnership, through economies of scale, will allow to do that so much more. We're also excited about expanding and sharing our abilities to find best practices in clinical variations."

To secure New Hanover commissioner and hospital authority board approval, Novant agreed to form its first-ever medical-education partnership with UNC Health and its medical school.

UNC Health already provides educational and clinical services to the New Hanover system, which is made up of 855 licensed beds at three hospital campuses.

Novant would acquire affiliated New Hanover Regional practices, clinics and facilities, certain properties and certain equity interests in subsidiaries and joint ventures.

It would agree to continuing services at current level, if not enhanced, for at least 10 years.

According to media reports in the Wilmington area, the New Hanover system announced plans for a $210 million, 66-bed community hospital. It would be built in the Scotts Hill community near the Pender County line.

The system's certificate-of-need application with the N.C. Division of Health Services Regulation list that the hospital, if approved, is projected to open in the fall of 2024.



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