NMa launches further investigation into acquisition of mobility products manufacturer Handicare
The acquisition of mobility products manufacturer Handicare by private equity firm Nordic Capital may impede competition in the field of powered wheelchairs. The Netherlands Competition Authority (NMa) has come to this conclusion after a first investigation. That is why it has also come to the conclusion that the planned acquisition requires a license. The NMa will first be investigating the effects on competition in greater detail before issuing the license, if one at all.
Market share in the Netherlands
One of the funds that Nordic Capital has full control over is, among other funds, Permobil, a manufacturer of powered wheelchairs. Another fund of Nordic Capital is planning to buy Handicare, a firm that manufactures and sells various products, including manual wheelchairs, powered wheelchairs and mobility scooters. The NMa investigation has revealed that, after the acquisition, Nordic Capital would have a very high market share in the Netherlands on the powered wheelchair market. A lack of competition in this market could result in higher prices or less quality. Either way, it would ultimately hurt end users. In its further investigation, the NMa will be exploring to what extent other suppliers can be attractive alternatives, and under what circumstances customers of Handicare and Permobil are able switch to these alternative suppliers.
License application process
If firms apply for a license, the NMa must decide within 13 weeks whether or not it approves the concentration. When reviewing mergers and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a dominant position can have negative effects on the price, quality and product selection in the market. In such a case, the NMa could attach conditions to the concentration, or it could disapprove it.