​Press Release 18/2019

 

  

The AdC (Autoridade da Concorrência – Portuguese Competition Authority) has adopted a clearance decision on the merger concerning the acquisition of sole control of Hospital São Gonçalo de Lagos (HSGL) by Grupo Hospital Particular do Algarve (HPA Group), facing the impending market exit of HSGL and its assets.

 

On the 14th of may 2019, the AdC, based on the information gathered up to that date, initiated an in-depth investigation to the proposed merger, as it considered that the acquisition of HSGL by the HPA Group could give rise to significant impediments to effective competition in the affected markets, both in terms of the provision of medical services in private hospitals in the Algarve, and in the provision of medical consultations in the areas of influence of the clinics operated by HSGL.

 

Nonetheless, the AdC collected evidence that HSGL meets the requirements of the ‘failing firm defence’, which means that the assessment of the merger’s potential to give rise to significant impediments to effective competition should not take place by comparing the likely situation post-merger to the competitive conditions existing at the time of the merger, but, instead, to a scenario where, absent the merger, HSGL and its assets would exit the market.

 

The application of the ‘failing firm defence’ in merger control takes place only in particular and exceptional circumstances, and is conditional on the proof of a wide set of criteria, having only been considered once by the AdC.

 

In the case at hand, the AdC has considered that the evidence collected demonstrates, on one hand, the financial difficulties faced by HSGL at the time of the merger, without credible restructuring efforts that would allow its recovery, that there is no less anti-competitive alternative purchase than the notified merger, as well as that in the absence of the merger, the assets of HSGL would inevitably exit the market.

 

The merger in case has already been implemented in late 2017, and was notified by HPA Group on the 9th of November 2018, following an inquiry proceeding by the AdC.The investigation by the AdC is proceeding in this light.

 

 

 

Lisbon, 13 September, 2019