MERGER IN HEALTHCARE SECTOR CLEARED SUBJECT TO COMMITMENTS

The Lithuanian competition authority Konkurencijos taryba has cleared the acquisition of joint control of InMedica and, indirectly, MediCA klinika, Kardiolita, Bendrosios medicinos praktika and Svalbono klinika by the investment fund INVL Baltic Sea Growth Fund and the companies Litgaja and RP PHARMA on condition that part of the healthcare business in the cities and districts of Kaunas and Šiauliai is sold.

On 12 February 2021 Konkurencijos taryba received the merger notification.

During the merger review process the authority's experts collected and analysed data from various healthcare companies, authorities, institutions and organisations, seeking to assess in detail the position of the merging parties and their competitors in each relevant market, and also to identify any possible future changes in market position, in order to determine whether the proposed transaction would negatively affect competition.

Konkurencijos taryba supported the findings of the Mergers Supervision Group that in the absence of commitments the transaction would create or strengthen a dominant position and significantly restrict competition in the markets of paid outpatient secondary-level cardiology, pulmonology and rheumatology services in the city and district of Kaunas, as well as in the markets of paid outpatient secondary-level cardiology and urology services in the city and district of Šiauliai.

Seeking to eliminate potential adverse effects of the merger on competition, on 8 November 2021 the merging parties submitted commitments to Konkurencijos taryba, which were revised on 12 November. The companies committed, among other things, to separate part of the InMedica business and transfer it to the buyer (or buyers), including all InMedica specialists providing paid outpatient secondary-level cardiology, pulmonology and rheumatology services in the city and district of Kaunas, as well as all specialists providing paid outpatient secondary-level cardiology and urology services in the city and district of Šiauliai.

The companies also undertook not to increase the number of specialists (doctors) that provide paid cardiology, pulmonology and rheumatology services in the city and district of Kaunas and paid cardiology and urology services in the city and district of Šiauliai, not to lure and encourage the transferred employees to terminate their employment relations with the business buyer (s) or related companies, as well as not to perform any actions that could negatively affect the posts or workload of the transferred doctors. In addition, the merging parties committed not to provide the relevant services, i.e. paid outpatient secondary-level cardiology, pulmonology and rheumatology services in the city and district of Kaunas, as well as all specialists providing paid outpatient secondary-level cardiology and urology services in the city and district of Šiauliai, in those InMedica clinics, from which the specialists were transferred.

Having evaluated the circumstances related to the transaction, the commitments of the merging parties and opinions of two healthcare companies received during the public consultation, the authority has decided to clear the merger on condition that part of the InMedica business in the cities and districts of Kaunas and Šiauliai is transferred to a buyer or buyers approved by the authority subject to conditions established in the commitments.

Konkurencijos taryba concludes that a proper and timely implementation of the proposed commitments will eliminate the identified competition concerns, i.e. a dominant position will not be created or strengthened and competition in the relevant markets will not be significantly restricted.

The decision of Konkurencijos taryba may be appealed to Vilnius Regional Administrative Court within one month of the date on which the merging parties receive the decision or it is published on the authority's website.

Konkurencijos taryba will later assess potential buyer candidates and approve a trustee that will assist the authority in monitoring the compliance of the merging parties with the conditions set out in the commitments, in order to be able to implement the transaction.

The merging parties will not be able to implement the transaction if they violate merger conditions and fail to fulfil commitments.