NMa to further investigate merger between health care institutions in Dutch provinces of Overijssel and Gelderland
The Netherlands Competition Authority (NMa) will further investigate the merger of four health care institutions based in the Dutch provinces of Overijssel and Gelderland. The NMa says the concentration of the ZorgAccent foundation and the Noord-West Twente homecare foundation, and the Sutfene, Carinova Leiboom Group and Vérian foundations may impede competition on the markets for domestic care, personal care and nursing, maternity care, and (psycho-geriatric and somatic) nursing home care. The NMa has therefore decided that a license is required for this merger to go through. The NMa will further investigate in the licensing phase the exact effects the merger will have on competition.
Domestic care
Almost all municipalities in the Apeldoorn-Zutphen, Midden-IJssel and Zwolle regions will see one of the bigger players in domestic care disappear after the merger. Yet it is this player, disappearing because of the merger, that has the potential to expand its domestic care activities. Competition could therefore be impeded as a result of the merger. When further investigating, the NMa will look, among other things, into the reasons why, after a tendering by a municipality, the contracted domestic care providers hardly attracted any new clients.
Personal care and nursing
In each of the health care office regions of Apeldoorn-Zutphen and Midden-Ijssel, one of the merger parties is the bigger players in personal care and nursing. The merging companies have a combined market share of 60 per cent in personal care and nursing in these regions. Only relatively small competitors are active on these markets. When further investigating, the NMa will look into the reasons why so few parties enter the service areas of the merger parties.
Maternity care
The merger will result in the companies in the province of Overijssel securing more than 80 per cent of the maternity care market. Only relatively small competitors are active on this market as well. Competition in the maternity care market in Overijssel could be impeded as a result of the largest competitor of the merging companies disappearing after the merger. When further investigating, the NMa will look, among other things, into whether the (geographical) market for maternity care is possibly larger than the province of Overijssel.
Nursing home care
If the NMa bases its merger review on Hellendoorn and surrounding municipalities, the merger partners will acquire a market share of 50 per cent or higher in (psycho-geriatric and somatic) nursing home care. The competitors are relatively small players. Furthermore, there are barriers to entry, which prevent new providers of nursing home care from becoming active on this market easily.
Merger review
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 range of the products or services offered on the market. It is important to have competition, because it encourages organizations to put more effort in offering more and better products and services. Competition offers consumers considerable advantages: competition generally leads to greater freedom of choice, higher quality and lower prices.