Finland's competition watchdog recommends blocking healthcare deal

Pihlajalinna Oyj

29/09/2020 14:36

HELSINKI, Sept 29 (Reuters) - Finland's competition
authority has recommended blocking  Mehilainen's 362 million
euros ($403 million) purchase of rival Pihlajalinna  PIHLIS.HE ,
as the deal would reduce the number of nationwide healthcare
companies to just two.        
    Finland's Market Court will issue a ruling on the deal
within three months of the recommendation from Finland's
Competition and Consumer Authority (FCCA), or by Dec. 29 at the
latest.
    In November 2019, privately-owned Mehilainen announced a
recommended cash offer for Pihlajalinna.  urn:newsml:reuters.com:*:nL8N27L1UO
    The FCCA said the proposed merger "would significantly
impede effective competition in the Finnish health services
market," and reduce the number of nationwide players to two. 
    Mehilainen said it regretted the FCCA's decision and would
hold talks with Pihlajalinna to decide how to proceed and
whether to extend its offer period, due to expire on Oct. 15.
    The FCCA described its decision as rare - only the fifth
recommendation to block a deal since 1998, when merger control
began in Finland.
    "The merger would likely lead to significant price increases
... to the detriment of customers and taxpayers," it said,
adding the Finnish healthcare market had concentrated rapidly
over the last decade.
    Pihlajalinna said in a statement: "We remain committed to
the tender offer in accordance with the combination agreement
but will prepare for all possible outcomes." 
    CVC Capital Partners funds own 57% of Mehilainen.
    ($1 = 0.8989 euros)

 (Reporting by Anne Kauranen; Editing by Mark Potter)
 ((anne.kauranen@thomsonreuters.com; +358925166112;))