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Friday, 19 April 2013

Hospital mergers

The proposed merger between Royal Bournemouth NHS Foundation Trust and Poole NHS Foundation Trust is the first such merger to have been considered by the Competition Commission. The process seems to have run into some difficulties, as the CC has issued s. 109 notices to the parties requiring them to provide information and documents. It has followed that up with an extension to the reference period of the inquiry until the information is provided to the satisfaction of the CC. See: http://tinyurl.com/d9olcdj
It is unusual for the CC to issue in s. 109 notices and extend an inquiry because of a failure to comply with them. In two previous cases where this was done, Sports Direct/JJB and BBC Worldwide/Channel 4/ITV, in the former the parties were unable to comply because they had been subject to investigations by the OFT in a separate cartel investigation while in the latter negotiations between the parties were still continuing. In both these cases, the CC was prepared to accept that these circumstances made the failure to comply with the s. 109 notice reasonable. No such statement has been made in this notice. This is mysterious, particularly because this notice comes into force just before submissions were supposed to be received in advance of the provisional findings (originally due in late April). It is not normally in the parties' interest to delay a merger decision (market investigations are perhaps a different matter) particularly when it is argued that one of the parties is failing financially. Reading between the lines, the parties may be having difficulties in explaining what the benefits of the merger are going to be, an issue on which Monitor gave the merger a mixed report.

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