Sacramento-based Sutter Health and Minneapolis-based Allina Health's pending combination took a step forward this week with the signing of a definitive agreement, the nonprofit systems announced Thursday.
The agreement locks in the plans shared earlier this year in a letter of intent—namely, that the cross-market deal would bring more than $2 billion of investment to Allina's markets and that the smaller system would become the "Upper Midwest Division of Sutter Health."
Now the organizations are left with securing state and federal regulatory approvals before the deal can close, which they expect to happen before the end of this year.
“This important milestone brings us one step closer to our goal of partnering to enhance care, support our teams and expand clinical capabilities and research as a strong, nonprofit health system,” Lisa Shannon, president and CEO of Allina Health, said in Thursday's announcement. “With our combined expertise, complementary strengths and aligned missions and visions, I am confident we will be well-positioned to meet the evolving needs of our patients and communities now and well into the future.
Should the deal close, the resulting organization would span 39 hospitals as well as more than 400 primary and specialty care sites that collectively see over 5 million patients annually. The organization would also employ 88,000 people, with 18,000 aligned physicians.
March 17, 2026
Allina Health to join Sutter Health in $26B proposed transaction
Sacramento-based Sutter Health and Minneapolis-based Allina Health unveiled plans to join and form a 39-hospital, $26 billion nonprofit health system.
The pair said Tuesday that they have signed a letter of intent for Allina to join Sutter. Allina would maintain its brand and regional headquarters but operate as the Upper Midwest Division of Sutter. Under that arrangement, Sutter is also committing $2 billion to bolster care access and patient experience investments in Allina’s Minnesota and western Wisconsin markets.
“This includes establishing new ambulatory and specialty care sites to fill care gaps and meet growing community needs, as well as recruiting more physicians and enhancing AI and digital health capabilities,” Sutter Health President and CEO Warner Thomas, who would maintain those titles should the deal close, said in the announcement. “Building on our complementary strengths and combined expertise, we will build a healthcare innovation engine that accelerates how ideas move from development and design into improving the health of patients and communities.”
The systems said they plan to complete due diligence and finalize terms for a definitive agreement “over the coming weeks and months,” targeting a close before the end of 2026 should regulatory reviews run smoothly. A representative for Allina described the structure of the proposed agreement as being similar to a member substitution but noted that the deal's final structure will be outlined in the pending definitive agreement.
Alongside the 39 hospitals, the resulting organization would include more than 400 primary and specialty care sites that collectively see over 5 million patients annually. The combination would also employ 88,000 people, with 18,000 aligned physicians.
Among the benefits of their proposed partnership, the systems led their announcement with the synergistic technical expertise of their organizations and surrounding communities: Sutter’s immersion in Northern California's artificial intelligence and platform development and Allina’s seat in the medtech and engineering hub of Minnesota.
“The proposed combined system will be uniquely positioned to be a national leader in digital and technological advancements that meaningfully improve patients’ and caregivers’ experiences, while continuing to provide the compassionate care their respective communities have relied on for decades,” the announcement reads.
Such efforts, outlined in the announcement, include AI and digital solutions that would reduce administrative burdens for caregivers along with more convenient appointment scheduling for patients via digital consumer tools.
More broadly, the organizations said they expect the combination will help the organizations bolster physician and clinician recruitment, improve patient affordability and grow their capabilities, “particularly in clinical centers of excellence.”
“We are incredibly excited for the opportunity to harness the collective strength of our two mission-driven organizations to make a difference in the lives of our patients, communities and care teams,” said Allina Health President and CEO Lisa Shannon, who would also maintain those titles in regard to the to-be-formed Upper Midwest Division. “As one nationally leading, locally committed nonprofit health system, we will be uniquely positioned to be at the forefront of innovation, building upon the expertise of our physicians, advanced practice providers, nurses and team members to chart a new path for healthcare.”
Twenty-seven-hospital Sutter is the larger of the two organizations, with $19.8 billion reported total revenue and a $509 million operating income in 2025 (excluding impacts of the to-be-approved 2025 Hospital Fee Program). In the past year, it opened 31 additional care sites, added more than 1,100 physicians and reached 3.6 million patients.
Allina reports $6 billion of revenue with a $95.4 million operating loss and has not had a positive operating margin for the past few years. It operates 12 hospitals and more than 100 other sites.