South Dakota's Sanford Health and Minnesota's Fairview Health Services have announced a plan to merge.
Sioux Falls-based Sanford and Minneapolis-based Fairview revealed their merger plan on Tuesday, with the two nonprofits having signed a "non-binding letter of intent" to combine and "create a new health system."
Under the terms of the deal, Sanford Health will become the parent company of both nonprofit entities, with Sanford CEO Bill Gassen to become the top executive of the combined system.
According to the announcement, Fairview CEO James Hereford will stay on the job for one year after the closing.
The combined system aims to join Sanford's experience serving rural communities with Fairview's experience in urban areas.
“With Sanford Health, Fairview Health Services has found a partner that shares our Midwestern values and our commitment to affordable, accessible and equitable care delivery,” Hereford stated Tuesday.
"Our complementary capabilities mean that together, we are uniquely positioned to improve clinical outcomes, develop new care delivery models, expand opportunities for employees and clinicians across our broader operational footprint, and apply our combined resources to positively impact the well-being of our patients and communities today and for decades to come.”
Sanford Health serves more than one million patients across 47 medical centers, after a period in which it has aggressively expanded across the Dakotas and western Minnesota.
Fairview Health Services includes more than 31,000 employees across 11 hospitals and more than 80 outpatient clinics, with most of its locations in the Twin Cities metro.
State regulators will need to sign off on the final deal, which is expected to close in 2023.
Sanford pursued a similar deal with Fairview in 2013, which ultimately failed.
Then-Attorney General Lori Swanson scrutinized the proposed merger because of how tax breaks and donations had supported Fairview's growth, according to MPR News.
It's also not clear at this time how the merger would impact Fairview's collaboration with the University of Minnesota and the University of Minnesota Physicians on the health organization known as M Health Fairview.