A merger that would have created the largest provider organisation in England has been shelved.

King’s College Hospital, Guy’s and St Thomas’ and South London and Maudsley foundation trusts were investigating becoming one organisation, along with the university King’s College London.

The process, which had got to the outline business case stage, would have created an organisation with a turnover of £2.3bn and would have run a unique combination of physical and mental health services.

King’s College Hospital Foundation Trust has a turnover of approximately £820m, Guy’s and St Thomas’ Foundation Trust has a turnover of £1.1bn and South London and Maudsley Foundation Trust has a turnover of £370m.

The current largest provider organisation in England is Barts Health Trust, which merged Barts and the London hospitals, Whipps Cross University Hospital and Newham Hospital in April 2012 and has a combined turnover of £1.25bn.

In a statement King’s Health Partners, the academic health science centre that all the potential merger partners belong to, said: “This is not the right time, not least because we will only [develop a full business case] if we are confident that a case for merger is likely to be approved by the regulators.”

The Competition Commission recently blocked the merger of Royal Bournemouth and Christchurch Hospitals Foundation Trust and Poole Hospital Foundation Trust on the grounds that it would diminish patient choice.

HSJ understands the legal costs of taking the London trusts’ case through the competition regime could cost in the order of £10m and that City law firm Clifford Chance had been instructed on the initial scoping work.

The King’s Health Partners statement indicated the merger proposal could be revived at a later date. It said: “The further work we have been doing points us to the conclusion that only a merger between the NHS foundation trusts as well as closer integration with the university would enable us to maximise the benefits of our academic health science centre to patients.

“Organisational change on this scale and complexity would need to take place at a measured pace, informed by clear evidence of the benefits for the patients and communities we serve.”

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