California Attorney General Kamala Harris issued the final approval Tuesday needed for Stanford Health Care to proceed with its acquisition of ValleyCare Health System (VCHS) and its medical center in Pleasanton.

Harris' approval ends a nearly year-long effort by the governing board of directors of ValleyCare to find a partner as the health system plunged deeper into debt.

While allowing Stanford Health Care to acquire ValleyCare, Harris also ruled that the Pleasanton-based health system must continue providing medical services here for at least five more years, including its 24-hour emergency medical operation and most other services now available.

The current ValleyCare board of directors and CEO Scott Gregerson apparently will remain in place for now with some consolidation, along with "substantially all of the employees employed by VCHS," Harris said in a 21-page letter and "Conditions to Change" packet.

"We are very encouraged by the report," Gregerson said. "The work of the Attorney General was thoughtful and considered, and the community will be well served by her decision."

"This decision validates the work of the (ValleyCare) board of directors and honors the will of our corporate membership many of whom supported this hospital for over 50 years."

He said Stanford will now review the terms as proposed.

"ValleyCare is a great hospital and is now poised to be far better than it has ever been," Gregerson added. "I would be remiss if I didn't thank the employees and physicians for their unyielding efforts to serve this community during a challenging time and we are awed by the potential this partnership will bring."

As part of the merger agreement, Stanford will provide a capital commitment of $50 million during the first three years and will be co-obligated on, or guarantee, ValleyCare's $85 million revenue bonds in order to resolve the current bond covenant compliance issues.

Although ValleyCare will remain in existence as a nonprofit, public benefit corporation, it will operate as a subsidiary of Stanford. ValleyCare's corporate members, including some still active who paid as little as $50 to help build Valley Memorial Hospital in 1961, will be terminated as Stanford assumes full operating and management control over ValleyCare.

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Stanford Health Care-ValleyCare merger approved