Inquiry launched over CUF's acquisition of a hospital in the Algarve region
The Portuguese Competition Authority (Autoridade da Concorrência, AdC) has initiated an in-depth investigation into the acquisition of the Grupo Hospital Particular do Algarve (HPA Group) by CUF – Sociedade Gestora de Participações, S.A. This probe aims to assess the potential impact on competition within the private hospital healthcare services market in Portugal.
The transaction, which involves CUF acquiring sole control of HPA, consolidates their presence in the private hospital sector. The AdC's move to a full national probe signals concerns about whether this acquisition could reduce competition by increasing CUF’s market power, potentially affecting service quality, prices, and patient choice.
The AdC's investigation typically examines market shares, competitive dynamics, barriers to entry, and the effects on consumers and other healthcare providers. Given the strategic importance of private hospital healthcare services, the Authority's scrutiny aims to ensure that this consolidation does not harm competition or the broader healthcare market dynamics.
The operation under investigation translates into the acquisition, by the largest national operator, of one of the main regional operators, whose activity is concentrated in regions where CUF previously had no presence. This could create significant obstacles to effective competition in the market for hospital healthcare services by private units.
The AdC has identified potential competition concerns in a potential elimination of potential competition. Given the national relevance of CUF and the regional importance of HPA, the operation could significantly strengthen the bargaining power of healthcare providers and complementary subsystems. The AdC warns of potential negative impacts along the value chain, including potential increases in charges for final beneficiaries.
The purchase of HPA by CUF was reported to the Competition Authority in April. The AdC's in-depth investigation may result in recommendations for the buyer to comply with in order to receive approval for the deal. However, it is important to note that this investigation does not imply a final decision, and the AdC may decide not to oppose or prohibit the deal, with the possibility of the buyer complying with recommendations to give the 'green light' to the deal.
The hospital healthcare sector has been marked by a process of consolidation, accompanied by a deterioration in commercial conditions and significant barriers to new entries. The provision of hospital healthcare services by private entities has been growing significantly in recent years, driven by the expansion of health insurance and complementary health systems.
The AdC has stressed that it conducts in-depth investigations when it considers necessary additional diligence. The deterioration in commercial conditions in the hospital healthcare sector has been noted. The AdC emphasized that this is not a final decision.
[1] https://www.adc.pt/pt/noticias/adc-inicia-investigacao-de-fase-de-profundidade-no-processo-de-aquisicao-do-grupohospital-particular-do-algarve-pela-cuf [2] https://www.jornaldenegocios.pt/noticias/economia/adc-inicia-investigacao-de-fase-de-profundidade-no-processo-de-aquisicao-do-grupohospital-particular-do-algarve-pela-cuf-20210506143804265 [3] https://www.reuters.com/business/healthcare-news/portugal-competition-authority-opens-in-depth-probe-into-cufs-acquisition-of-algarve-hospital-group-2021-05-06/ [4] https://www.forbes.pt/noticias/2021/05/06/adc-inicia-investigacao-de-fase-de-profundidade-no-processo-de-aquisicao-do-grupohospital-particular-do-algarve-pela-cuf/
The in-depth investigation initiated by the AdC is focused on assessing the potential effect of CUF's acquisition of HPA Group on the finance of business within the private hospital sector. This acquisition could create significant obstacles to effective competition in the market for hospital healthcare services by private units, potentially increasing charges for final beneficiaries.
