Undertaking date

Undertaking type

s.87B undertaking

Section

50

Company or individual details

  • Name

    Healthscope Ltd

    ACN

    144 840 639

Undertaking

On 15 June 2016, the ACCC accepted undertakings (the Primary Undertaking, the Healthscope Undertaking, together the Undertakings) from Primary Health Care Limited (Primary) and Healthscope Limited (Healthscope) in relation to Primary’s completed acquisition of Healthscope’s pathology business in Queensland.

 The Primary Undertaking requires Primary to divest to an ACCC approved purchaser those pathology assets that Primary acquired from Healthscope and still owned at the time of giving the undertaking. The Healthscope Undertaking requires Healthscope to divest additional pathology assets to an ACCC approved purchaser. As part of accepting the Undertakings, the ACCC approved Medlab Pathology Pty Ltd (Medlab) as the purchaser of the package of assets. The package of divestiture assets will be sold to Medlab to enable it to establish a competitive presence in Queensland. 

The ACCC considered that if the Undertakings were implemented, the completed acquisition would not be likely to have the effect of substantially lessening competition in one or more markets for the supply of community pathology services in Queensland or relevant regions within Queensland in contravention of section 50 of the Competition and Consumer Act 2010.

The ACCC found that Healthscope’s pathology business in Queensland provided a significant competitive constraint on Primary and Sonic Healthcare Limited, the two major full-service pathology providers in that state. Therefore the ACCC was concerned that the completed acquisition would substantially lessen competition in one or more relevant markets in Queensland.

The objective of the Undertakings is to address the ACCC’s competition concerns that would otherwise arise as a consequence of the completed acquisition.

The Primary Undertaking aims to achieve this objective by placing obligations on Primary to:

  1. ensure that the Primary divestiture assets are sold to Medlab;
  2. create a viable, effective, stand-alone, independent and long term competitor in the supply of community pathology services in Queensland;
  3. ensure that Medlab has the necessary consents, personnel, technical assistance and transitional supply to compete effectively with Primary in the supply of community pathology services in Queensland;
  4. maintain the economic viability, marketability, competitiveness and goodwill of the Primary divestiture assets prior to divestiture pursuant to this Undertaking;
  5. refrain from, for a period of five years from the completion of the divestiture of the Primary divestiture assets, disparaging Medlab or making reference to Medlab’s business, except in certain circumstances;
  6. desist from, for a period of 42 months from the completion of the divestiture of each collection centre, taking steps to enter or entering into any arrangement for the right to use or occupy that collection centre for the purposes of offering community pathology services  except in limited circumstances after the first 24 months;
  7. ensure that any of the Primary divestiture assets that are not transferred to Medlab by the end of the initial sale period are sold to an alternative ACCC approved purchaser; and
  8. provide for the effective oversight of Primary’s compliance with the Primary Undertaking.

The Healthscope Undertaking aims to achieve this objective by placing obligations on Healthscope to:

  1. ensure that the Healthscope divestiture assets are sold to Medlab ;
  2. create a viable, effective, stand-alone, independent and long term competitor in the supply of community pathology services in Queensland;
  3. ensure that Medlab has all the necessary associated assets and rights to enable it to compete effectively with Primary in the supply of community pathology services in Queensland;
  4. ensure that the Healthscope divestiture assets are maintained and separately and readily accounted for prior to divestiture;
  5. ensure that if the Healthscope divestiture assets are not transferred to Medlab by the end of the initial sale period, they are sold to an alternative ACCC approved purchaser; and
  6. provide for the effective oversight of Healthscope's compliance with the Healthscope Undertaking.

A copy and a description of the Primary Undertaking can be found as a separate entry on the Public Registers website.