The Commerce Commission has declined Connor Healthcare Ltd’s application make a full takeover of Acurity Health Group Ltd because it would see 3 of the 4 private hospitals in the Wellington region fall under common ownership.
When Connor’s takeover formally closed on 21 November, acceptances combined with its existing holding exceeded 97%. It had Overseas Investment Office approval for the takeover, and Commerce Commission clearance was the only remaining obstacle.
Connor Healthcare is 100% owned by Evolution Healthcare Ltd, which also owns Boulcott Hospital in Lower Hutt.
NZX-listed Acurity (ex-Wakefield Health Ltd) owns & operates the Wakefield & Bowen hospitals in Wellington and Royston in Hastings.
The proposed takeover would leave only Southern Cross Hospital independent of Connor Healthcare.
Commission chairman Mark Berry said yesterday the commission wasn’t satisfied that the proposed acquisition wouldn’t, or wouldn’t be likely to, substantially lessen competition in respect of a number of medical procedures performed in private hospitals in the greater Wellington region.
“Boulcott Hospital provides an important competitive constraint to the other hospitals in the Wellington region. For medical insurance providers, the greater the number of hospitals they have to play off against each other, the more competitive the price they will achieve, which ultimately benefits consumers. If the acquisition proceeded, insurers would have had one less option and, for some procedures, Connor Healthcare would have been the only significant provider in the greater Wellington region.
“For some of the procedures, we believe Southern Cross Hospital would be unable to expand to a sufficient extent to replace the competition that would be lost. The greatest difficulty Southern Cross Hospital would be likely to face, apart from enough physical capacity, would be attracting sufficient specialists to its facilities to perform procedures.”
Attribution: Commission release.