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Tenet Healthcare to buy Vanguard Health for $1.73 billion plus debt

Hospital operator Tenet Healthcare Corp will buy smaller rival Vanguard Health Systems Inc for about $1.73 billion plus the assumption of debt to expand into new geographies, further evidence of consolidation being driven by U.S. President Barack Obama’s healthcare reforms.

U.S. hospital stocks have rallied this year as investors expect the companies to benefit as more Americans are covered by health insurance and hospitals lose less money treating the uninsured.