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General Superintendence suggests blocking the acquisition of Franca Regional Hospital n by Unimed Franca

Merger

The case was placed under Law 8.884/94
published: Oct 18, 2012 10:00 AM last modified: May 02, 2016 03:09 PM

CADE’s General Superintendence recommended that CADE’s commissioners block the Franca Regional Hospital acquisition by Unimed Franca, in São Paulo. The transaction involves the acquisition of Franca Regional Hospital and its health insurance, the "Regional Saúde". The case was placed under Law 8.884/94.The process was sent to the reporting commissioner who will address the issue at the Tribunal for final decision by CADE.

According to CADE’s General Superintendence, the acquisition presents high harm risks to consumer healthcare services and health insurance in Franca and its surroundings. The resulting concentration reaches more than 90% of the individual health insurance market, and can reach more than 80% of the collective health insurance and of general hospitals markets. Entry conditions and presented competition and efficiencies were not considered sufficient to address the competitive concerns.

Besides damages to the private market and consumers, it was concluded that the acquisition may also have negative effects on the regional public health system if the higher prices resulting from the transaction lead more people to demand SUS (Brazilian public health system), further burdening the public system.