Atlantic Health and Saint Peter's Healthcare System Cancel Merger Plans Amid Shifting Healthcare Landscape

Atlantic Health and Saint Peter's Healthcare System, two prominent New Jersey nonprofit healthcare providers, have mutually agreed to terminate their planned merger. The decision, announced on October 6, 2025, comes in response to evolving trends in the national healthcare sector.

Merger Cancellation Details

The proposed merger, initially announced in early 2024, would have created a combined entity with over $5 billion in annual revenue. Atlantic Health, based in Morristown, and Saint Peter's Healthcare System, headquartered in New Brunswick, had signed a definitive agreement in June 2024 for a member substitution transaction that would have brought Saint Peter's under Atlantic Health's umbrella.

Saad Ehtisham, President and CEO of Atlantic Health, expressed disappointment but emphasized the appropriateness of the decision given current circumstances. Leslie D. Hirsch, President and CEO of Saint Peter's Healthcare System, echoed these sentiments, stating, "Although we have agreed to mutually terminate the pending transaction, we are disappointed by this result."

Financial Performance and System Profiles

Despite the merger cancellation, both healthcare systems report strong financial performances. Atlantic Health, which operates five acute care hospitals and a children's hospital, posted an operating income of $103.4 million in 2024, slightly surpassing its 2023 figure of $145.6 million. The system's operating income for the first half of 2025 stands at $66.7 million, marginally exceeding the same period last year.

Saint Peter's, a single-hospital health system centered around its 478-bed Saint Peter's University Hospital, reported a $40 million operating income in 2024, up from $18.3 million in 2023. For the first two quarters of 2025, Saint Peter's maintains a $13.6 million operating income.

Future Outlook and Collaborations

While the merger will not proceed, both organizations have expressed a desire to maintain existing collaborations. These include their participation in the Healthcare Transformation Consortium, a partnership of independent systems that collectively bids for third-party administration of self-insured employee health plans.

The healthcare providers aim to explore potential new efforts to ensure high-quality care access for central New Jersey residents. Saint Peter's, which has fulfilled its Catholic mission for over 118 years, remains optimistic about its future as it reassesses its strategic direction.

This development follows Saint Peter's previous unsuccessful merger attempt with RWJBarnabas Health, which was blocked by federal regulators a few years prior.