Community Health Systems (NYSE:CYH) and Health Management Associates (NYSE:HMA) have entered into a definitive merger agreement in which Community Health will acquire Health Management for approximately $7.6 billion, the companies jointly announced today. The transaction would include Community Health's assumption of approximately $3.7 billion of Health Management's debt, 

Community Health will pay for the transaction with a combination of cash and Community stock, valued at the company's closing price on July 29 of $13.78 a share. The cash portion will come out to $10.50 per share in cash and 0.06942 shares of Community stock for each Health Management share. At close, Health Management shareholders will own around 16% of the combined company's shares.

At its completion, the deal will have Community Health owning or operating around 206 hospitals in 29 states, with a bed count of more than 31,000.

Community Health said it doesn't expect the transaction to have a positive effect on earnings until after the merger's first year of operation.

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