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A federal judge ordered Wednesday that Novant Health can move forward with its plan to buy two North Carolina hospitals, denying the Federal Trade Commission’s request for an injunction.

The FTC sued to block the deal in January, arguing that it would give Novant control of more than 65% of the region’s inpatient market. The case, one seeking to block nearby hospitals from merging and creating an even more powerful dominant player, is the FTC’s bread and butter. The agency has shied away from challenging cross-market and vertical mergers, but this one is right in its wheelhouse, which makes the setback surprising. 

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Under the deal, announced early last year, Novant would buy two hospitals in the same county from for-profit Community Health Systems for $320 million. The hospitals, Lake Norman Regional Medical Center and Davis Regional Medical Center, are only a 25-minute drive from one another. Davis Regional used to be a full-service hospital, but is now a psychiatric hospital. The deal also includes a group of 24 doctors, a majority interest in an endoscopy center, and a holding in a planned surgery center. 

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