INOVA WITHDRAWS MERGER PLANS WITH PRICE WILLIAM HEATH SYSTEM AFTER THOROUGH FTC INVESTIGATION AND LAWSUITS

On June 6, 2008, Inova Health System Foundation (“INOVA”) withdrew its offer to acquire Prince William Health System (“PWHS”) after determining that the FTC’s lawsuit to block the deal would not be resolved for a very long period of time.
On May 12, 2008, the FTC filed a complaint in the U.S. District Court of Eastern Virginia in an attempt to prevent the merger. The FTC alleged that the transaction would reduce competition for general acute care inpatient hospital services and as such would increase costs for patients in Northern Virginia. Allowing this acquisition to take place would have given INOVA control over 70 percent of the licensed beds in Northern Virginia. This filing in the Eastern District was preceded by a unanimous decision by the FTC commissioners to issue an administrative complaint on May 9, 2008. The Director of FTC’s Bureau of Competition considered this a “major victory” for consumers in Northern Virginia and congratulated his staff on the investigation and preparation for litigation. INOVA, the largest hospital system in Northern Virginia, sought to acquire PWHS, a non-profit general acute care hospital with a 180 licensed beds, based in Manassas, Virginia.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com