NMa approves merger of Amsterdam Thuiszorg and Cordaan under strict conditions
The Netherlands Competition Authority (NMa) has imposed certain requirements on the Stichting Amsterdam Thuiszorg [Amsterdam Home Care Foundation] before it may merge with the Stichting Cordaan Groep. The NMa will approve the proposed merger once Amsterdam Thuiszorg hives off a quarter of its activities in the area of household care, personal care and nursing and counselling. This decision from the NMa will ensure that the market share of Cordaan and Amsterdam Thuiszorg together is smaller than Amsterdam Thuiszorg's share before the merger. The new combination will also encounter competitive pressure from other players on the Amsterdam healthcare market.
After the NMa notified Amsterdam Thuiszorg and Cordaan on 11 October 2007 of its objections to the original merger plans, the parties submitted a proposal on 29 April 2008 to hive off a quarter of Amsterdam Thuiszorg's activities to Evean and the Zonnehuisgroep Amstelland. After inquiry and consultation with other market parties, the NMa ascertained that Evean and the Zonnehuisgroep Amstelland are suitable buyers and that no new competition problems will arise from the divestment. Evean and the Zonnehuisgroep are already established players in Amsterdam and considered powerful enough by the NMa to pose stiff competition to the new merger company after the merger. The divestment of 25% of Amsterdam Thuiszorg's activities to Evean and the Zonnehuisgroep Amstelland will more than compensate for the addition of Cordaan (less than 10%) to Amsterdam Thuiszorg.
In its investigation the NMa also looked into possible chain effects as a result of the merger. Chain effects involve the interconnection of healthcare products, such as for example home care and nursing home care. The NMa does not see the new situations yielding any chain effects that could lead to a competition problem.
The Stichting Cordaan Groep is active in the area of household care, personal care and nursing, counselling, nursing and convalescent home care, day activities, disabled care and sheltered living for the mentally disabled. The Stichting Amsterdam Thuiszorg is also active in the area of household care, personal care, nursing and counselling. Amsterdam Thuiszorg also offers related services including meal services, alarm response and transfer nursing.
The Netherlands Health Authority (NZa) supports the NMa's conclusion in its opinion. The NZa looked into how the merger will affect affordability, accessibility and quality of healthcare and concluded that the merger will not have any adverse effects for healthcare in the Amsterdam region if the conditions set by the NMa are satisfied. The clients' participation councils of Amsterdam Thuiszorg, Cordaan and Evean did not take the opportunity to submit a statement of opinion to the NMa.
Merger testing
In case of mergers and takeovers, the NMa assesses whether the actual competition will not be significantly impeded, particularly through the creation or consolidation of a dominant position. Such a dominant position can have negative effects on the price, quality and diversity of products and services offered on the market. Competition is important because it stimulates organisations to undertake to provide more and better products and services. Competition leads to considerable advantages for consumers: it leads in general to more freedom of choice, higher quality and lower prices.
The merger decision will be published as soon as possible on the NMa's website (www.acm.nl).