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BUSINESS DAY SA’s biggest private hospital group by value presented its final argument to the Competition Tribunal SA’s biggest private hospital group by value, Mediclinic International, presented its final argument to the Competition Tribunal on Tuesday as it fights to expand its footprint in North West. The Competition Commission blocked Mediclinic’s planned acquisition of Matlosana Medical Health Services (MMHS) near Klerksdorp in July 2017. At the time, the commission said it had recommended to the tribunal that the deal be prohibited because it is likely to substantially reduce competition in Klerksdorp and the surrounding areas, and would allow Mediclinic to unilaterally increase prices as soon as the transaction took effect. The dampening effect on competition was compounded by the fact that two regional rivals had no plans to expand, it said. Mediclinic owns private hospitals in Southern Africa, Switzerland and the Middle East, and has a minority stake in the UK private hospital group Spire Healthcare. It has a market capitalisation of R41.4bn and is trailed by rivals Life Healthcare (R39.5bn) and Netcare (R38.5bn). It owns just more than 8,100 private hospital beds in Southern Africa, while Life Healthcare and Netcare own 9,055 and 10,605 in the region respectively, according to data published on their websites. Like its rivals, Mediclinic has a stronger presence in some parts of the country than others: 18 of its 48 SA hospitals are in the Western Cape, 12 in Gauteng and only two in North West. MMHS owns two multidisciplinary hospitals in Klerksdorp — Wilmed Park and Sunningdale — as well as the Parkmed psychiatric hospital and the Caerus nursing training school. Mediclinic consultant Roly Buys said the company was one of several parties that bid for MMHS when it put itself on the market. It presented a good business opportunity, as Mediclinic did not at that stage have any hospitals in Klerksdorp, and its nearest facility was in Potchefstroom, 50km away, he said. The commission blocked Life Healthcare’s planned acquisition of Lowveld Hospital in 2015 on similar grounds. In both cases, the commission found the proposed mergers would lead to an immediate and substantial increase in tariffs, once they were changed from the model used by the National Hospital Network to the fee structure used by the acquiring party. In the case of Life Healthcare, the merger was classed as an intermediate one, so the commission had the final say. As the Mediclinic deal is classed as a large merger, the tribunal will decide on the matter. Mediclinic will still have the option of appealing if the tribunal does not find in its favour. The National Hospital Network is a group of independently owned private hospitals that competes against the industry’s three big players. The tribunal declined to comment, while the commission had not responded to Business Day’s questions at the time of publishing.
Created at 2019/01/23 04:41 PM by Mediclinic
Last modified at 2019/01/23 04:41 PM by Mediclinic