Brussels, 19/03/2007 (Agence Europe) - On Friday 12 March, the European Commission approved under the EU Merger Regulation the proposed acquisition of joint control of Capio AB, a Swedish provider of healthcare services, by the private equity funds Apax Partners Worldwide LLP ("APW") of the UK, Apax Partners SA ("APSA") of France and Nordic Capital of the Channel Islands. The Commission's decision is conditional upon the divestiture by Capio AB of most of its UK subsidiaries.
Capio is a Swedish provider of healthcare services for both public and private customers via its private "acute general hospitals" (privately funded hospitals which admit patients for surgical operations and other medical treatments), diagnostic centres and private psychiatric hospitals. It is active in Sweden, Norway, Finland, Denmark, France, Spain, Germany and the UK.
The acquiring private equity companies control several undertakings that are active in the same markets as Capio or in upstream markets. APW controls General Healthcare Group Limited ("GHG"), a provider of private healthcare services throughout the UK and Mölnlycke Healthcare, a supplier of surgical and wound care products. The French hospital chain Vedici is controlled by APSA, and Nordic Capital has an interest in Nycomed and Altana, both suppliers of pharmaceutical products, as well as Unomedical and Atos Medical, both suppliers of medical devices.
The proposed transaction would result in horizontal overlaps for private acute general hospital services and the provision of outsourced health care services to the National Health Service (NHS) in the UK, both at national and local level.
The combination of the activities of GHG and Capio would lead to a decrease in the number of nationally operating private acute general hospital chains in the UK from four to three. This would strengthen the market position of GHG and Capio and could offer scope for price increases for the private medical insurance companies that are clients of these hospitals. At a local level, the proposed transaction would give the parties a significant share of a large number of markets in the UK. This could result in less effective competition on the local markets concerned. The Commission's concerns were echoed by its market investigation.
To address the Commission's concerns the parties have offered to divest all of Capio's UK private acute general hospitals, its Independent Sector Treatment Centres outsourcing business and its specialist eye hospital. The Commission's market test of the commitments confirmed that the proposed divestiture would remove the horizontal overlap in the UK, and eliminate the serious doubts as to the compatibility of the transaction with the single market.
In addition, the proposed transaction would result in the creation of a substantial number of vertical relationships between the parties involved in Sweden, Norway, France, Spain, Germany and the UK, but these did not raise competition concerns. (cd)