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CADE applies restrictions to the acquisition of hospitals in Brasilia

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20/08/2013 21:00 Demarest News

​The Administrative Council for Economic Defense - CADE decided to impose restrictions to  the concentration act between Rede D'Or São Luiz S.A., Medgrupo Participações S/A and Hospital Santa Lúcia S/A. 
The involved parties executed a Performance Commitment TCD, which determines the sale of either Hospital Santa Lúcia or Hospital Santa Luzia, as well as the sale of Hospital do Coração.  
The concentration act refers to the acquisition, by Rede D'Or São Luiz S.A., of shares of Medgrupo and its controlled companies, and also shares from Hospital Santa Lúcia.  
Rede D'Or São Luiz S.A. is active in Brasilia by means of Hospital Santa Luzia, Hospital do Coração and Acreditar Oncologia Ltda. Hospital Santa Lúcia, on its turn, is controlled by Medgrupo.  
CADE's General Superintendence - SG verified that that as a result of the transaction, Rede D'Or São Luiz S.A. would have a share in the relevant market of general hospitals of approximately 60% in the Federal District. The relevant geographic market, according to CADE's jurisprudence, was defined as the radius of 10 km or 20 minutes of displacement from each hospital involved in the transaction.   
In view of the high envisaged concentration, CADE determined the sale of Hospital Santa Lúcia or Hospital Santa Luzia, once they are rivals and hold significant market share, in order to maintain the marketplace competitive.  
A second competition concern identified by SG was the high concentration of hospital beds for cardiology. The remedy suggested by the Superintendence, was the sale of Hospital do Coração.
It is worth mentioning that the disinvestment plan suggested by CADE, other than maintaining the competition in the relevant market of general hospitals and the dispersion of rooms specialized in cardiology, also aimed to assure the quality of the services and fair prices to the consumers. 
The Reporting Commissioner of the case, Mr. Ricardo Machado Ruiz, highlighted that the conditions imposed are indispensable for the maintenance of a balanced competition in the marketplace. 


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