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MERGERS: AMO approved the acquisition of control by AGEL group over the hospitals in Handlová, Bánovce and Košice-Šaca

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On October 28, 2015 the Antimonopoly Office of the Slovak Republic, Division of Concentrations (the Office) approved the concentration grounded in acquisition of direct exclusive control of the undertaking AGEL a.s., Czech Republic („AGEL“) over the undertakings NEMOCNICA Handlová - 2. súkromná nemocnica, s.r.o. seated in Handlová („Nemocnica Handlová“), NEMOCNICA Bánovce - 3. súkromná nemocnica s.r.o. seated in Bánovce nad Bebravou („Nemocnica Bánovce“), FINHOSP, s.r.o,. seated in Košice („FINHOSP“), FINHOSP PLUS s.r.o. seated in Košice („FINHOSP PLUS“) and FINHOSP III s.r.o. seated in Košice („FINHOSP III“) or in common „Acquired Companies“.

AGEL is the joint stock company established and existing under the laws of the Czech Republic. Main subject of AGEL and of companies controlled by AGEL (AGEL group) is provision of health care. AGEL group also provides supplies of consumer goods for medical purposes into health care institutions.

Acquired companies are established and existing under the laws of the Slovak Republic. Hospital Handlová and hospital Bánovce provide the healthcare. Companies FINHOSP, FINHOSP PLUS and FINHOSP III undertake in the area of rental property, mostly real estates. Undertaking FINHOSP is the only shareholder of company Nemocnica Košice - Šaca a.s. seated in Košice, which provides the healthcare.

The Office identified that activities of undertakings concerned horizontally overlap in the following segments:

- hospital healthcare (HHC);
- ambulance healthcare (AHC);
- services of common examination and medical institutions (SEandMI);
- occupational health service (OHS).

Between the undertakings concerned exist the vertical interconnection, namely with regard to the supplies of consumer goods for medical purpose into the medical facilities.

Regarding the previous decision-making practice in the area of HHC and AHC the Office has analyzed local markets in which the undertakings concerned operate and found that the assessed merger does not result in geographic overlap of their activities since neither within HHC or AHC as a whole, or at the level of particular (merged) experts there is a significant migration of patients between the cathment areas of hospitals being acquired and hospitals belonging to AGEL group.

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 and AHC services.

The Office did not identify the competition concerns in the relevant market resulting from the subjected merger in the SEandMI and OHS segments, either.

Assessing the potential vertical impact of the subjected merger in relation to the supplies of consumer goods for medical purposes into the health care institutions, the Office relied on the fact that sufficiency of alternative customers exists for suppliers of consumer goods for medical purposes, competing with AGEL group in this market.
Health care providers also have sufficient opportunities of supplies of consumer goods for medical purposes from entities other than the AGEL group. Given the above, the Office did not identify competition concerns which would be grounded in restriction or exclusion of other suppliers from the supply market, or in market foreclosure relating to a substantial number of customers.

After evaluation of all acquired materials and information the Office concluded that the assessed merger does not infringe effective competition in the relevant market, mainly as result of creation or strengthening of dominant position and it approved the merger.

Decision came into force on October 29, 2015.