Citing anticipated financial pressure as a result of federal health-care reform, South Jersey Health System Inc. in Vineland and Underwood-Memorial Health System Inc. in Woodbury said Thursday that they are merging.

"There is no doubt that health-care reform is creating an environment in which partnerships and alliances can be even more beneficial to health systems and the communities they serve," Michael McLaughlin, chair of the Underwood-Memorial Health System board of directors said in a news release.

Peter Galetto, chairman of the board of the South Jersey Health System, called the deal a merger, not a "takeover or acquisition."

Boards of both systems have approved the merger and submitted it to federal and state authorities for approval, which they expect to receive this spring.

South Jersey Health System employs 3,500 and has a medical staff of more than 600 physicians. It operates the 262-bed SJH Regional Medical Center in Vineland, the 96-bed SJH Elmer Hospital in Elmer, and the SJH Bridgeton Health Center, which has 65 mental-health and inpatient hospice beds.

Underwood-Memorial Hospital has 305 beds in its Woodbury facility, and employs nearly 1,700 full- and part-time. Its medical staff numbers almost 400.