NMa imposes requirements on the merger between Evean, Philadelphia and Woonzorg

The Netherlands Competition Authority (NMa) imposed remedies on the proposed merger between the Evean Group, Philadelphia Zorg and Woonzorg Nederland. The proposed merger was objected to on the grounds that it raised concerns that it would restrict competition on the relevant markets. Following an amendment to the proposed merger, whereby Woonzorg is to divest 11 nursing homes and/or homes for the elderly, the NMa approved the merger. As a consequence of the remedies proposed by the parties, consumers will continue to retain sufficient freedom of choice and the level of competition in the healthcare sector will remain sufficiently high.

This is the first time that the NMa has assessed a merger between two healthcare providers (Evean and Philadelphia) and a housing corporation (Woonzorg). Evean and Philadelphia are, among other activities, also active in the fields of services in homes for the elderly, nursing home services, home care and the care of handicapped people. Woonzorg is active in the field of the realisation and rental of housing, homes for the elderly and nursing homes.

The activities of Woonzorg, Evean and Philadelphia overlap in numerous fields. The most important of these is the vertical relationship between the rental of nursing homes and homes for the elderly by Woonzorg and the provision of nursing home services and services in homes for the elderly by Evean and Philadelphia. The NMa objected to the merger as originally proposed as in a number of areas within the province Groningen and the Zaanstreek competition would have been extremely restricted. In these areas Evean or Philadelphia already provide services in homes for the elderly and/or nursing home services; while their competitors in these areas are dependent on Woonzorg for the rental of homes for the elderly and nursing homes. Housing is an essential part of the services which Evean, Philadelphia and their competitors provide. In the future, the merged combination could attract the market share currently enjoyed by these competitors. In a worst case scenario, this inflated market share of the merged combination might have become so high that it would have resulted in behaviour which would detrimentally effect competition in this sector.

Remedies
On the basis of the investigation carried out by the NMa, the merging parties amended their original merger proposal. In order to remove the NMa's concerns regarding the possibility that competition would be restricted, Woonzorg is to divest 11 houses in which nursing home services and/or services in homes for the elderly are offered by Philadelphia or Evean's competitors. As a result of these remedies, the consumers of healthcare services will retain sufficient options following the merger and, moreover, the merged entity will face sufficient competitive pressure from other competitors in the market.

The Competition Act requires that in the event of acquisitions and mergers, the NMa assess whether actual competition is being significantly threatened, particularly due to the creation, or strengthening of a dominant position. This threat may have detrimental effects on the price, quality and/or diversity of the supply. When reaching its decision, the NMa also considered the views of competitors and other third parties active in the sector and of the Netherlands Care Authority (NZa). In this context, the NZa looked at the consequences a merger might have on the affordability, accessibility and quality of the healthcare. It could not exclude the possibility that this proposed merger would have negative effects. However, considerably due to the strength of the competing healthcare providers in the regions concerned, the NMa concluded that the amended merger proposal satisfies the requirements placed on concentrations by the Competition Act.

The official decision is to be found (in Dutch) on the NMa's website (www.acm.nl).