Tenet Healthcare and Paladin Healthcare have signed an agreement to sell Tenet’s Hahnemann University Hospital, St Christopher’s Hospital for Children and other related operations in Philadelphia.

The sale to American Academic Health System (AAHS), a newly formed affiliate of Paladin Healthcare, will also include Tenet-owned physician practices.

AAHS owns and operates academic medical centres and general acute care hospitals across the country.

At present, Paladin Healthcare manages four general acute care hospitals in Southern California and Howard University Hospital located on the campus of Howard University in Washington, DC.

Paladin Healthcare chairman Joel Freedman said: “We are committed to sustaining and enhancing the outstanding clinical and academic programmes at both hospitals, providing the capital investment they need to thrive, and preserving their long-term future as financially stable healthcare providers and employers.”

Tenet expects to receive proceeds of about $170m from the transaction.

Tenet’s Philadelphia hospitals and related operations generated about $790m of net operating revenue during the 12 months ended 30 June 2017.

The transaction is subject to regulatory approvals and other closing conditions and is expected to be completed early next year.

Tenet Healthcare through its subsidiaries, partnerships and joint ventures, including United Surgical Partners International, operates 77 general acute care hospitals, 21 short-stay surgical hospitals and over 460 outpatient centres in the US, in addition to nine UK facilities.