Following the offer of divestment undertakings, the Australian Competition and Consumer Commission will not oppose DCA Group Limited's proposed acquisition of MIA Group Limited, ACCC Chairman, Mr Graeme Samuel, announced today.
"This view has been formed on the basis of undertakings offered by DCA to divest seven radiology businesses in Adelaide, and to release radiologists at the divestiture sites and on the Eyre Peninsula and the Mid-North Rural/Barossa", Mr Samuel said. "The ACCC also accepted undertakings from MIA to ensure that sites currently operated by MIA continue to be operated as a going concern in the period before their acquisition by DCA".
"After extensive market inquiries, the ACCC found the divestiture of these sites and the release of the radiologists necessary to maintain competition in the radiology markets within South Australia".
"The delivery of quality diagnostic imaging services to consumers in Adelaide and regional areas in South Australia was paramount to the ACCC's acceptance of the undertakings".
DCA's court enforceable undertaking consists of five main elements:
- the divestiture of seven diagnostic imaging suites in Adelaide at: the Mayo Clinic in North Adelaide; the Memorial Clinic in the Memorial Hospital; the Calvary Clinic in the Calvary Hospital; the Ingle View Clinic at Ingle Farm; the Mitcham Clinic at Hawthorn; the Europa Clinic at Salisbury and the Salisbury Clinic. The divestiture sites include combinations of modalities including x-ray, CT, ultra-sound and/or mammography, as well as a nuclear medicine facility at Calvary and a Medicare rebateable magnetic resonance imaging (MRI) unit at Memorial
- the maintenance of the DCA sites as a competitive going concern in the period leading up to the completion of the divestitures so that the businesses are sold in the same condition as they were prior to the divestiture
- the release from existing contracts of radiologists, nuclear physicians, radiographers and sonographers currently working at the seven divestiture sites who wish to acquire or work at one or more of the seven sites
- if required by a purchaser/s, DCA to make available radiologists, nuclear physicians, radiographers and sonographers to work at the divestiture sites for a period of up to 12 months to ensure continuity of services, and
- the release of relevant radiologists, nuclear physicians, radiographers and sonographers from restraint of trade obligations at the conclusion of existing contracts with public hospitals in the Mid-North Rural/Barossa and the Eyre Peninsula.
DCA's undertakings maintain competition in the market by requiring that the sites are divested to a purchaser, or purchasers, which will compete independently of DCA after the acquisition. The ACCC must approve the purchaser or purchasers of the businesses. The undertakings also recognise the critical role that radiologists and other key professionals have in the competitive.
In certain regional areas, releasing radiologists from their contractual restraint of trade obligations will allow competitors to tender to provide services and have access to the radiologist who has previously attended that site. This recognises the benefits of continuity of services to patients and the public hospitals.
"DCA has also made a public commitment to implementing a trade practices compliance program. The ACCC encourages all companies to embrace the Trade Practices Act and considers that the implementation of a comprehensive trade practices program is an important element of ensuring compliance", Mr Samuel said.
The ACCC believes that the undertaking ensures that DCA will continue to face competitive constraints in South Australia. DCA will, within three weeks of completing the acquisition of MIA, advertise the sites for sale in a major South Australian newspaper.
The undertaking will appear on the ACCC's public register and reasons for this decision will be posted on the ACCC website, in due course.