ACCC not to oppose merger between Lake Imaging and Western Medical Imaging

The Australian Competition and Consumer Commission will not oppose the proposed merger between Lake Imaging and Western Medical Imaging, ACCC Chairman, Mr Graeme Samuel, said today.

After an initial investigation the ACCC published a Statement of Issues on 27 February 2008 which identified a number of preliminary concerns with the proposed merger. Concerns included the ability for the merged entity to reduce the ability of rival diagnostic imaging providers to compete in the Ballarat area, and the extent to which Western Medical Imaging is likely to be perceived as a viable alternative provider of diagnostic imaging and diagnostic imaging reporting services, absent the proposed merger.

"In reaching its decision in relation to the provision of diagnostic imaging reporting services, the ACCC considered the competitiveness of Western Medical Imaging and its ability to constrain Lake Imaging were the proposed merger not to proceed.

"The ACCC also took into account that post-merger, there will effectively only be a single group that will supply radiologist services to the Ballarat region. The potential impact of this concentration of radiologists on Ballarat Health Services and Primary Health Care's Eureka Medical Centre was also considered given their current reliance on the merger parties for radiologists.

"The ACCC's inquiries suggested that Western Medical Imaging was unlikely to expand its operations and may only provide a limited constraint to Lake Imaging's operations. Whilst the ACCC considers that having a single provider of radiologists in Ballarat is not ideal, Western Medical Imaging is unlikely to pose a strong competitive constraint to Lake Imaging for the provision of diagnostic imaging reporting services were the proposed merger not to proceed.

"In reaching its decision in relation to the provision of diagnostic imaging services in Ballarat, ACCC inquiries suggested that the competitive constraint currently exercised by Ballarat Health Services and Eureka Medical Centre is unlikely to significantly change."

A Public Competition Assessment with more detailed reasons for this decision will be available on the ACCC's website, under Mergers in due course.