NMa will further investigate health care merger in Arnhem

The Netherlands Competition Authority (NMa) will further investigate the merger between two health care providers in the Dutch city of Arnhem. According to the NMa, the planned concentration of Pleyade Foundation and Catharina Foundation could impede competition on the markets of nursing home care, psychogeriatric and somatic home care in the municipality of Arnhem and/or in the greater Arnhem area.

By merging, these providers could obtain 50 to 75 percent of the market of nursing home care in Arnhem. The NMa has therefore decided that the merger cannot go through without applying for a license first. Should the providers file a license application, the NMa will further investigate, among other aspects, the size of the geographical markets of nursing home care. It is then required to issue a decision within 13 weeks on whether the concentration is allowed or not.



Turnover thresholds in health care

The planned merger needs to be notified of since turnover thresholds have recently been lowered determining when health care providers are required to notify their concentrations of. Since January 1st, 2008, numerous similar mergers have been notified of, but this is the first time the NMa has decided that such a merger requires a license.



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.