North Memorial Health, with major hospitals in Robbinsdale and Maple Grove, and South Dakota-based Sanford Health announced Friday that they have signed an agreement to merge into a single nonprofit health system.

The proposed merger—subject to governmental review—comes at a time when North Memorial recorded an operating loss for 2025 and it had sought subsidy funding from the Minnesota Legislature.

“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,” Trevor Sawallish, North Memorial Health CEO, said in a news release.

“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,” Sawallish said. “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.”

In announcing the deal, leaders emphasized that the combined organization would invest $600 million into its Robbinsdale and Maple Grove hospitals.

This proposed deal surfaced as hospitals face mounting financial strain, workforce shortages, and growing demand for specialty care.

Robbinsdale hospital’s financial condition

The future of the Robbinsdale Hospital has been a major concern of the North Memorial Health board, because many of its patients are low-income and lack private insurance that pays higher fees than Medicaid.

Bill Gassen, president and CEO of Sanford Health said, “we are committed to meeting the evolving health care needs of the region, including sustaining Robbinsdale Hospital as a critical safety-net provider of Level 1 trauma and emergency services and investing in expanded capacity and outpatient care at Maple Grove Hospital to meet rising demand in one of the metro’s fastest-growing communities.

Sanford Health said Friday it plans to double the size of North Memorial’s Maple Grove hospital, which has Minnesota’s largest birth center. If the merger is completed, Sanford pledged that Maple Grove patients would see an expansion of emergency care, addition of inpatient and surgical capacity, and improved access to cardiology and interventional radiology to support minimally invasive procedures.

Sanford, based in Sioux Falls, South Dakota, already serves large portions of rural Minnesota. “Sanford Health operates or has affiliation agreements with 20 medical centers and 74 clinics across the western third of the state—from International Falls to Bemidji, Thief River Falls and Worthington,” the health system said in Friday’s announcement.

In 2013 and 2022, Sanford proposed merging with Minneapolis-based Fairview Health Services. Those deals fell apart after multiple stakeholders raised objections. In 2023, former Govs. Tim Pawlenty, a Republican, and Mark Dayton, a Democrat, publicly opposed a Sanford merger, in large part because they didn’t think it was appropriate for a South Dakota entity to have control over University of Minnesota medical facilities, which Fairview owns.

A North Memorial-Sanford combination wouldn’t face that type of roadblock.

Keith Ellison’s merger review

Minnesota Attorney General Keith Ellison on Friday encouraged Minnesotans to provide public input on the planned merger. “Proposed health care consolidation requires careful examination,” Ellison said in a news release. “I will use the full range of regulatory tools to protect Minnesotans’ access to quality, affordable health care.”

Ellison doesn’t hold the power to approve or deny the merger transaction. But he does have the ability to file a lawsuit to try to block a merger, if he contends the combination breaks the law or isn’t in the public interest.

If the merger transaction is completed, the Robbinsdale and Maple Grove hospitals, 22 clinics offering primary care, and 6,800 workers in the state would fall under the Sanford umbrella.

Gassen would serve as president and CEO of the combined organization, alongside the current executive team. The Twin Cities region of Sanford Health would continue to be led by Sawallish, current CEO of North Memorial Health.

“When we first met Sanford Health, it was clear we share the same values—rooted in our communities, putting patients first and being straightforward about the realities health care faces,” Sawallish said in the release.

The deal gives Sanford access to the large Twin Cities market, where Allina Health, M Health Fairview, and HealthPartners are major actors.

Friday’s announcement said that Sawallish, on behalf of the Twin Cities region of Sanford Health, would work with “a local board of directors representing the broader community to provide oversight, including medical staff matters.”

North Memorial Health currently has a large board, which includes several people with major business and leadership experience.

Two of those North Memorial board members—Charlie Weaver and Reuben Moore—would serve on the Sanford Health board of trustees. Weaver is an attorney and former legislator, and he served in the Pawlenty and Ventura administrations in state government. He also served as the executive director of the Minnesota Business Partnership for 20 years. Moore is a veteran health care executive, who currently is president and CEO of Minnesota Community Care, which is a federally qualified health center.