Hospital Chains Plan Merger to Create Biggest Health Provider

Two large hospital corporations announced plans Saturday to merge, a move the companies’ executives said would create the nation’s largest health care provider.

Nashville-based Hospital Corp. of America and Columbia Healthcare Corp. of Louisville, Ky., agreed to a stock-for-stock transaction.

The boards of both companies approved the plan Saturday to give HCA stockholders 1.05 shares of Columbia common stock in exchange for each HCA share held. About 338.2 million shares of Columbia’s stock would remain outstanding after the merger.

“The direction of health care delivery in the future will focus on quality results and cost-efficient operations, and we believe this transaction strengthens our efforts toward this goal,” HCA Chief Executive Officer Thomas F. Frist Jr. and Columbia Chief Executive Officer Richard L. Scott said in a joint statement.

The new company would become Columbia-HCA Healthcare Corp., owning and operating 190 hospitals with more than 42,000 beds in 26 states and two foreign countries.

It would be the largest health-care provider in the nation, officials of the two companies said.

Columbia operates 94 acute-care and specialty hospitals, with 21,627 licensed beds. HCA operates 96 acute-care and specialty hospitals, with 20,485 licensed beds. Both operate outpatient facilities.

Expected annual revenues of the new company would be more than $10 billion.

The merger must be approved by shareholders of both companies.