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CADE’s General Superintendence suggested restrictions to hospital acquisitions in Brasília

Merger

After the General Superintendence’s work conclusion, the case goes on to Cade’s Tribunal
published: Dec 18, 2012 10:00 AM last modified: May 02, 2016 03:19 PM

Through an official opinion released last Tuesday (11/12), Cade’s General Superintendence recommended the approval with restrictions of the purchase of shares of Medgrupo Participações S.A. and of Santa Lúcia Hospital S.A. by Rede D’Or, all located in Brasília. Medgrupo controls the following hospitals and clinics in Brasília: Santa Helena, Prontonorte, Renascer, Maria Auxiliadora, Santa Lúcia, Centro Radiológico do Gama and Centro Radiológico de Brasília. Rede D’Or holds Santa Luzia Hospital and Coração Hospital in Brasília.

After the General Superintendence’s work conclusion, the case goes on to Cade’s Tribunal, responsible for the final decision on the merger, which is being processed under law no. 8.884/94.

The General Superintendence’s recommendation consists of the merger approval being conditioned to Rede D’Or selling one of these two sets of property: either the sale of Santa Lúcia Hospital or the sale of both Santa Luzia Hospital together with Coração Hospital.

Santa Lúcia Hospital is the biggest rival of Santa Luzia’s Hospital and, according to the official opinion, both could not be run by the same economic group without any harm to Competition. To the General Superintendence, the restriction is needed because, if the merger is completed, Rede D’Or will have a participation higher than 60% in some of the Brasília general hospital market indicators, aside from the management of two local hospitals with more infrastructure (Santa Lúcia and Santa Luzia Hospital).

According to the official opinion, the entrance conditions of other companies in this market, the rivalry between competing hospitals and the presented allegations of efficiency are not enough to diminish competition setbacks that the operation could cause.