Tenet Healthcare Corp, a US hospital operator said on Monday that it will acquire smaller rival Vanguard Health Systems Inc. The deal was priced at US$1.73 billion. This will put the hospital in a better position to benefit from millions of Americans who are to get insurance under Obama's healthcare reform.

Investors expected the revenue of the hospital to grow from treating more Americans insured under the reform. Major hospitals chains would increase their stocks in the sector.

The acquisition of Vanguard by Tenet is expected completion by the end of the year. The US health overhaul takes full effect by January next year.

The combination of the two companies will be the second biggest for profit US hospital operator. The total revenue of about US$15 billion in 2012 was achieved by Tenet behind HCA Holdings Inc. but surpassing Community Health Systems Inc. A hostile takeover effort from the Community Health in 2011 was fended off by Tenet.