MERGERS: AMO approved the acquisition of control by PENTA group over the hospitals in Dunajská Streda and Galanta

21.07.2015
On July 8, 2015 the Antimonopoly Office of the Slovak Republic, Division of Concentrations (the Office) approved the concentration consisting in acquisition of indirect exclusive control of the undertaking PENTA INVESTMENTS LIMITED, Channel Islands (PIL) over the undertakings Nemocnica s poliklinikou Dunajská Streda, a.s. seated in Dunajská Streda (Hospital DS) and Nemocnica s poliklinikou Sv. Lukáša Galanta, a.s. seated in Galanta (Hospital Galanta).
 
Undertaking PIL acts in the territory of the Slovak Republic in more areas, but the undertakings having been acquired – Hospital Galanta and Hospital DS act in the health care, thus the Office focused on the impact of merger in this sector.
 
The Office identified that activities of undertakings concerned overlap in the following segments:
• hospital healthcare (HHC),
• ambulance healthcare (AHC),
• services of common examination and medical institutions (SEandMI),
• pharmaceutical care (PC),
• transport healthcare (THC).
 
As health care in SR is covered mainly by the obligatory public health insurance and PIL controls also the health insurance company DÔVERA, a.s. (ZP Dôvera) which provides obligatory public health insurance, the Office has been considering also this fact.
 
Hospital healthcare
 
In analysing the impact of the merger on conditions of competition the Office assessed hospitals as a whole and at the same time also in terms of individual specializations. Based on so-called migration data the Office concluded that the acquired hospitals act in the local geographic markets.
 
In HHC the Office concluded that the merger would not result in significant overlapping of activities of PIL on one side and Hospital DS and Hospital Galanta on the other side.Based on this fact the Office did not identify the competition concerns in the view of horizontal assessment of merger impact in the area of providing HHC services.
 
The prices which the health insurance companies pay to hospitals for provided HHC are not regulated; they result from negotiations between the health insurance company and hospital, thus the Office assessed whether PIL, through ZP Dôvera, as a result of assessed merger could provide worse contractual condition (lower prices, limits) to the competitors of hospitals belonging to undertaking PIL what would result in weakened position and elimination of competing hospitals.The Office also assessed whether the bargaining power of hospitals controlled by the undertaking PIL could be strengthen, thus they could require higher payments or other more advantageous contractual conditions for provided healthcare from VšZP and ZP Union, what would result in weakened position of competing hospitals not having this bargaining power and consequently in possible outflow of patients from competing hospitals.
 
However, the Office did not identify negative impacts of merger in these views.
 
Ambulance healthcare
 
AHC could be divided to general ambulance healthcare including gynaecological and dental ambulance healthcare (“GAHC”) and specialized ambulance healthcare (“SAHC”).
 
After implementation of the merger PIL will control only negligible amount of GAHC facilities and the healthcare insurance companies providing pubic healthcare insurance are obliged to conclude a contract with each general practitioner for adults and each general practitioner for children and adolescents that has at least one insured person of the healthcare insurance company, thus no competition concern results from the merger regarding these specializations.
 
In more details the Office dealt with the impact of the merger on competition referring to provision of SAHC. SAHC could be divided based on to particular specializations, since they are focused on diagnosis and treatment of other type of diseases, thus in patients´ view they are not substitutable.  Geographic market in this case is of local nature.  
 
The Office found that the activities of AHC providers belonging to the economic groups of the undertakings concerned in the identified geographic relevant markets overlap in the following specializations: cardiology, surgery, orthopedics, internal medicine, psychiatry, ophthalmology, respiratory medicine and phthisiology, physiotherapy, balneology and medical rehabilitation, neurology, algesiology, but only minimally, thus the Office did not identify competition concerns in this area.
 
In terms of relation to healthcare insurance companies, it can be concluded that healthcare insurance companies are important partners of AHC providers, since the significant income of ambulances consists of the payments from the healthcare insurance companies. Prices are not regulated andthey result from negotiations between the health insurance companies.
 
The Office found that there are only few specializations and regions in which the undertaking PIL will acquire significant position and it also took into account the existed control of the undertaking PIL over ZP Dôvera. The Office did not identify competition concerns in the area of AHC.
 
Services of common examination and medical institutions
 
Since the activities of the undertakings concerned in the area of SEandM do not overlap geographically, the Office did not identify the negative impacts of assessed merger on competition in the area of SEandM.
 
Pharmaceutical care
 
In this area only PIL and Hospital DS in Dunajská Streda are active. In Dunajská Streda there are 17 public pharmacies. The Office concluded that the number of public pharmacies in the local market of Dunajská Streda does not indicate the infringement of effective competition in the area of providing PC in Dunajská Streda.
 
Transport healthcare
 
Since the activities of the undertakings concerned in the area of providing THC do not overlap geographically and are not realized in neighbouring regions, the negative impacts of assessed merger on competition in the area of providing THC were not identified.
 
The decision came into force on July 8, 2015.
Last update:27.07.2015