CADE conditionally clears Unimed’s acquisition of Hospital Policlínica Cascavel

On 25 June, the Administrative Council for Economic Defense (CADE) cleared with restrictions, Unimed’s acquisition of Hospital Policlinica Cascavel. The transaction was authorised through a Merger Control Agreement to mitigate any competition concerns identified during the case analysis.

Unimed Cascavel is a medical cooperative that gathers over 600 doctors and operates with a diverse structure of health services, including care centres, preventive medicine services, and specialised therapies. Hospital Policlínica Cascavel is a medium and high complexity care unit controlled by Grupo Hospital Care, which operates in healthcare services, including outpatient care, hospital care, and emergency/urgent care, in a municipality in the Brazilian state of Paraná.

According to Commissioner Victor Fernandes, rapporteur of the case, the transaction raised competition concerns related to potential foreclosure risks and discriminatory practices against competitors due to the vertical integration between the health insurance company and the hospital.

To face these risks, the companies proposed a set of commitments, accepted by CADE. The agreement provides that the contracts between Unimed Cascavel and other hospitals in the municipality is to be maintained for the period of ten years, to avoid harming competition. There is also mandatory equal treatment to all service providers, with the adoption of standard clinical protocols and guidelines, applied evenly to owned and third-party healthcare units.

Another measure prevents new acquisitions by the companies in the market of general hospitals in Cascavel for five years, to preserve the rivalry level in the sector. In addition, Unimed Cascavel committed to invest in Hospital Policlínica, focusing on the improvement of the infrastructure and the expansion of the services to the population.

Commissioner Victor Fernandes highlighted the importance of the remedies adopted to preserve competitive conditions in the local market. “In face of the substantial commitments proposed and undertaken by the applicants, the Merger Control Agreement is enough to solve the competition concerns identified in the case.”

Both the Office of the Superintendent General at CADE and an independent trustee will monitor the obligations presented, indicated by the parties and authorised by the antitrust authority. The professional will present annual reports with detailed information on the compliance with the conditions established, in addition to communicating to the agency immediately, if there is any evidence of non-compliance with the agreed measures.

The Tribunal of CADE agreed with the statement of the rapporteur and unanimously decided for the signature of the Merger Control Agreement.