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CADE applies restrictions in health benefits administration market acquisitions

Merger

A portfolio of at least 140 thousand clients of Qualicorp’s health care collective membership segment shall be sold.
published: Apr 10, 2014 10:20 AM last modified: Apr 12, 2016 02:25 PM

The Tribunal of the Administrative Council for Economic Defense – CADE approved with restrictions three acquisitions of Qualicorp Administração de Benefícios, on 9 April. The first operation refers to the acquisition of 60% of the Aliança Administração de Benefícios and GA Consultoria (File No. 08700.004065/2012-91). The second operation consists of the acquisition of client portfolio from Afinidade Administradora and Equilibrar Corretora (File No. 08012.000309/2012-14). The third operation refers to the acquisition of Grupo Padrão’s corporations (File No. 08012.003324/2012-21). 

CADE’s approval was subject to the signature of Performance Agreement (TCD, in its Portuguese acronym), in whichQualicorp commits to divest part of its clients portfolio. The divestment will be done in three parts: first the company will create and register a new benefits administrator at the National Health Agency (ANS in its Portuguese acronym). Then, it will endow the new administrator with a portfolio of at least 140 thousand clients of Qualicorp’s health care collective membership segment. Finally, the new administrator shall be sold to a current or new competitor in the market for the administration of health benefits. The deadlines inherent to the TCD are confidential.

According to the Reporting Commissioner, Ms. Ana Frazão, the shift of part of Qualicorp’s portfolio of collective health care membership plan clients to a current or new competitor will stimulate and reinforce rivalry in the market, which was extremely concentrated even before the acquisitions performed by the company. 

“The negotiated solution solves the competitive concerns of the three operations in a most appropriate way, even more so than undoing the only operation still reversible, Aliança’s operation, since the biggest Qualicorp’s market power is extremely concentrated in the health care collective membership segment”, said the Reporting Commissioner.

To Ms. Frazão, the agreed solution, in addition to facilitating CADE’s monitoring, was only possible due to Qualicorp’swillingness to commit to the structuring and execution of the measure.