Sioux Falls, South Dakota-based Sanford Health is planning to absorb the Twin Cities’ North Memorial Health in a deal that would bolster the rural health system’s Minnesota presence and bring new financial support to facilities in the fast-growing market.
The pair’s definitive agreement, unveiled Friday, includes the promise of a $600 million investment from Sanford to North Memorial. It would see North Memorial become a subsidiary of Sanford and serve as the “anchor” of the parent’s new Twin Cities care delivery region. That unit would be led by North Memorial CEO Trevor Sawallish and governed by a local board of directors, while two of its current board members transitioning to designated representation on the Sanford Health Board of Trustees.
The deal is expected to close before the end of the year, pending regulatory clearances and other customary closing conditions. Minnesota Attorney General Keith Ellison swiftly promised to review the proposed deal.
The affiliation, the systems said, would help to stabilize North Memorial Health-Robbinsdale Hospital, a safety-net hospital whose Level 1 trauma center and emergency services are at risk. The smaller organization’s other hospital—North Memorial Health—Maple Grove Hospital, which hosts the state’s largest birth center in a more affluent and growing community—will receive investments to double its size.
“By coming together as one nonprofit health care organization, with shared Midwest values and a deep commitment to the communities we serve, we will deliver more coordinated, regionally connected care—ensuring patients can access the right services, in the right place, at the right time,” Bill Gassen, president and CEO of Sanford Health, said in the statement.
Sanford Health describes itself as the country’s largest rural health system. The nonprofit employs 55,000 people and runs 58 hospitals, nearly 300 clinics, and other operations, including a health plan across the Midwest. It locked up a major expansion early last year when it merged with Marshfield Clinic in Wisconsin and Michigan’s Upper Peninsula. In 2025, it reported nearly $11.7 billion in revenue and a $210.9 million in operating income (1.8% operating margin).
The organization’s Minnesota footprint already includes operations or affiliation agreements with 20 medical centers and 74 clinics, primarily in the western part of the state. Of note, this is the system’s second recent attempt to expand into the more populous Minneapolis area, as a merger agreement with Fairview Health Services was repeatedly delayed by state officials and called off in 2023 (a prior deal between the same two organizations was also called off a decade earlier).
North Memorial Health is substantially smaller than Fairview, with its two hospitals, more than 20 clinics and 6,800 employees. It’s also been in a financial bind, seeking funds from the state to support the large government payer burden of its primary hospital to offset rising costs. A bill moving through the state’s legislature to support a separate safety-net system in Minneapolis was amended last week to remove North Memorial as an additional recipient of state funds.
“We’ve been open about the financial and regulatory pressures and the rising costs that make it harder to protect access to care on our own,” North Memorial’s Sawallish said in the announcement. “Through a deliberate national search, Sanford stood out as a partner who understands our true value and shares our belief that better—not just bigger—is what matters. This partnership is about staying strong for the long term—so our patients can keep getting the care they need close to home and our teams have the support they deserve.”
Beyond the support funding, the announcement described planned additions to Maple Grove Hospitals’ emergency care, greater capacity for inpatient and surgical care and a campus expansion to add primary and specialty care. They also outlined better access to care via Sanford Health’s ongoing virtual specialty care push, patient access to the 1,000-plus active clinical trials headed by Sanford’s research arm, expanded coverage for Minneapolis patients via Sanford Health Plan and improved clinical and non-clinical workforce recruitment.
“As one system, we will be better equipped to invest in expanded services and new technologies, navigate unexpected headwinds and build a stronger workforce pipeline,” Sanford’s Gassen said.
The deal quickly drew the attention of Minnesota’s attorney general, who has taken a proactive role in hospital dealmaking as of late under a healthcare transaction oversight law on the state’s books. His office doesn’t directly approve or deny healthcare deals, but may bring a lawsuit to block them if found to be afoul of the law or otherwise run contrary to the public interest. On Friday, the office called for public input on the combination as it spins up those efforts.
“As we have done and are currently doing with other healthcare transactions, we are conducting a thorough review of this potential acquisition to ensure it complies with the law and is in the public interest,” AG Ellison said in the notice. “Proposed health care consolidation requires careful examination. As long as I am Attorney General, I will use the full range of regulatory tools to protect Minnesotans’ access to quality, affordable healthcare.”
The health systems, in an online FAQ, said their “focus is to make care more affordable and easier to access,” adding that “healthcare costs are shaped by many factors—like drug prices, workforce shortages and insurance design—so no single organization can fix affordability on its own. But we can be accountable for what we do control: reducing duplication, investing in the right services and keeping care close to home so patients can get the right care at the right time.”
Service Employees International Union (SEIU) Healthcare Minnesota and Iowa, in a statement given to multiple outlets, said news of the combination is “worrisome” for its membership amid the high cost of care and healthcare staffing difficulties.
“It is especially concerning because previous merger attempts by Sanford Health to come into Minnesota have failed due to their values and corporate behavior,” the union said. “North Memorial is a community institution and it needs to prioritize healing members of our community and being an institution Minnesotans are proud to have in our state."