Health Systems to Take Merger-Based Charge

Health Systems International will take a $175- to $225-million charge in the first quarter for costs resulting from its merger with Foundation Health Corp. In a filing with the Securities and Exchange Commission, Woodland Hills-based Health Systems said the charge will account for expenses of negotiating and consummating the $1.27-billion combination and for integrating the two companies’ operations. Health Systems also said employment cuts at the new company will be necessary to achieve an estimated $110 million in cost savings from the combination with the Rancho Cordova-based Foundation Health. Health Systems shares slipped 37.5 cents to close at $24.375, while Foundation lost 25 cents to close at $31.625, both on NYSE.