Dive Brief:

• Two Philadelphia universities took a significant step toward an acquisition when they announced a formal merger agreement last week, outlining a process to be completed in the summer of 2022.

• Terms call for the 2,400-student University of the Sciences to merge into the 6,800-student Saint Joseph's University, creating a larger institution keeping the Saint Joseph's name and operating both universities' campuses for the foreseeable future.

• The two private universities said in February that they were exploring a deal after the University of the Sciences approached Saint Joseph's.

Dive Insight:

The deal demonstrates continued interest in mergers and acquisitions in the private nonprofit higher education space — particularly in the Northeast and university-heavy areas like Philadelphia. It also reflects demand for acquiring, starting or investing in science and healthcare programs. The universities present the change as allowing Saint Joseph's to expand its programming with professional offerings while keeping its liberal arts core.

The plan also illustrates how university mergers that appear to be good fits on paper are complex matters that take time to complete.

Regulators and accreditors will need to sign off on the acquisition before it's finalized. The two universities expect to do extensive integration planning before the deal is done. Decisions on staffing levels or whether layoffs will occur have yet to be made, said a Saint Joseph's spokesperson.

Details included in an FAQ about the deal include that Saint Joseph's board of trustees will continue to be the governing board for the combined institution, with four members of the University of the Sciences' board joining the Saint Joseph's board. Saint Joseph's president, Mark Reed, will continue as president after the merger is completed.

Leaders may have to address issues of the schools' unique histories and identities. Saint Joseph's is a Jesuit institution founded in 1851. It opened a new school for the first time in three decades in 2019, its School of Health Studies and Education.

The University of the Sciences was founded in 1821 and was known as the Philadelphia College of Pharmacy and Science until 1998. It lacks the scale needed to operate into the future, University of the Sciences President Paul Katz said. Its leadership began talking about a partnership or affiliation about four years ago as expected demographic changes threatened colleges.

"We have a lot of fixed costs," Katz said. "We need more students, or the numbers just don't work. So it's really about numbers and trying to get out ahead of this at a time when we felt we were in a good position."

When the acquisition was announced earlier this year, some faculty members voiced concerns about a Roman Catholic institution absorbing healthcare programs because of the church's opposition to contraception and abortion. The FAQ on the deal addresses the topic of Saint Joseph's religious affiliation, saying the university operates under the principles of religious freedom, "encouraging individuals and groups to practice their own faith as they choose."

"We do not believe that USciences' current academic offerings or research will be affected," the FAQ states.