Mumbai: Community Health Systems Inc will acquire Triad Hospitals Inc for $5.1 billion in a deal that would create the biggest publicly traded US hospital chain. Including $1.7 billion of Triad''s assumed debt; the deal is worth $6.8 billion.

Triad shareholders will receive $54 per share, a 9.4 per cent premium over the stock''s latest closing price. Nashville, Tennessee-based Community had revenue of $4.37 billion in 2006, while Plano, Texas-based Triad had revenue of $5.54 billion.

The combined entity would rank No.1 among publicly traded hospital chains, both in revenue and number of hospitals. Together, Community and Triad have 130 hospitals.
The biggest publicly traded hospital chain now is Dallas-based Tenet Healthcare Corp,. which had revenue of $8.7 billion last year.

Community is the dominant player in about 85 per cent of its current markets, primarily in the US Southeast and Southwest. Triad hospitals are located in the south and east of the United States. Areas of overlap between the companies include eastern Texas, Arkansas, Tennessee, Alabama, South Carolina and New Mexico.

The US hospital industry has been going through a lean period for long because of of weak fundamentals, due in part to the rising numbers of patients without health insurance and slowing patient admissions amid escalating health-care costs.

Community Health, which also said there is an opportunity to improve Triad''s profit margins, withdrew its 2007 earnings forecast in light of the deal.

Fitch Ratings said the deal would likely require refinancing of Triad''s current capital structure, which could push the community down several notches in its ratings.

The deal is subject to regulatory approvals.