Sutter Health, Allina Health reach agreement on merger

Sutter Health and Allina Health have taken another step forward in their plans to create one of America’s largest hospital systems.

The two health systems said Thursday that they have reached a definitive agreement on their plans to come together and form a new health system with 39 hospitals.

If regulators approve the deal, Allina Health would become part of Sutter Health and it would represent one of the larger health system mergers in recent years. Based in Sacramento, California, Sutter Health has pledged to invest $2 billion in Allina’s market, which covers Minnesota and western Wisconsin. The merged system would boast $26 billion in revenue.

Officials from both systems signed the definitive agreement Thursday at Allina’s corporate headquarters in Minneapolis. The systems are hoping to conclude the deal by the end of the year. They first announced their merger plans in March.

Warner Thomas, president and CEO of Sutter Health, wrote in a post on LinkedIn that it's “the next important milestone in our work to advance our shared vision of building a nationally leading, locally committed nonprofit health system.”

“Nonprofit health systems have a responsibility to think boldly about how we improve access, affordability and the experience of care for the people and communities we serve,” he wrote. “By bringing together our complementary strengths, expertise and innovation capabilities, we also have an opportunity: to accelerate solutions that help patients navigate care more easily and support the people delivering it every day.”

Lisa Shannon, president and CEO of Allina Health, wrote in a post on LinkedIn that she was proud to take a significant step forward.

“This definitive agreement brings us one step closer to partnering with Sutter Health to enhance care, support our teams and expand clinical capabilities and research as a strong, nonprofit health system,” Shannon wrote. “It also positions us for what’s next by expanding access and enhancing the patient experience.”

‘Cultural alignment’

In an interview with Chief Healthcare Executive® last month, Thomas pointed to the shared values and vision of Sutter and Allina.

“I think the cultural alignment, the view of the future is very important and to me, is a critical piece of the success of this relationship,” Thomas said last month.

Thomas told Chief Healthcare Executive® that he thinks Sutter can help Allina expand its services in the Twin Cities. He pointed to Sutter’s strengths in ambulatory care, digital health and the consumer experience.

“We think there's an opportunity to expand and grow and help Allina grow in the greater Minneapolis, St. Paul area,” Thomas said.

Thomas also said Allina brings strengths to Sutter Health, citing the system’s research and its centers of excellence.

“We think there's things we can learn back and forth,” Thomas said.

Sutter Health operates 27 hospitals in California. Allina Health runs 12 hospitals in Minnesota and western Wisconsin. Under the deal, Sutter would acquire Allina Health, which would become the Upper Midwest Division of Sutter Health. The Allina Health brand would continue in the midwest, and the regional headquarters would remain in Minneapolis.

Thomas would serve as president and CEO of the merged organization. Shannon would continue to serve as president and CEO of Allina Health.

Expanding access

The health systems say that patients would get more access to care through more outpatient locations and specialty care services. Sutter also projects more success in recruiting and retaining clinicians, in part by offering more digital tools to make their work easier and allow them to focus on patient care.

Minnesota Attorney General Keith Ellison has sought public comment on the planned merger.

“Proposed health care consolidation requires close scrutiny,” Ellison said in a statement last month. “As we have done with other transactions, we are conducting a thorough review of this potential acquisition to ensure it complies with the law and is in the public interest.

While there weren’t many hospital mergers in 2025, more health systems are pursuing mergers and acquisitions this year.

In the first quarter of 2026, there were 22 announced hospital mergers and acquisitions, according to data released last month by Kaufman Hall, a healthcare consulting company. That’s the biggest first quarter number of deals since 2020, Kaufman Hall says. In 2025, there were 46 announced hospital deals, which was the lowest number in 15 years,

Sutter Health has been expanding quite a bit over the past few years, as the health system has opened 45 facilities since 2023. Sutter aims to open new facilities in northern California in the next few years. The health system is also partnering with Santa Clara University to build a new medical school in Silicon Valley. The health system also announced it is the official healthcare partner of the San Francisco 49ers.

Read more: Sutter Health CEO Warner Thomas says shrinking won’t lead to success