CMA merger review: Hospital trust merger

Aldwych Partners secured CMA clearance for a merger between two hospital trusts operating nine hospitals in Manchester. This was the first UK merger to obtain competition clearance on customer benefit grounds. Aldwych Partners’ work on the transaction was recognised by Global Competition Review in its shortlist for European Merger Control Matter of the Year in 2018.

Aldwych Partners secured CMA clearance for a merger between two hospital trusts, Central Manchester University Hospitals and University Hospital of South Manchester, that operate nine hospitals in Manchester.

Our analysis of GP referrals of patients to these hospitals, as well as a review of contracts for specialised services, indicated that the CMA was likely to conclude that the merger would give rise to a substantial lessening of competition in a large number of services. The only viable route to a merger clearance decision was to argue that patients (i.e. customers) would benefit from the merger sufficiently to outweigh any concerns about a loss of competition; an outcome never previously achieved with the UK competition authorities.

Aldwych Partners worked with the two hospital trusts to identify how services would change following the merger and the benefits this would bring to patients. We were able to evidence patient benefits in a wide range of specialties, including cardiology, stroke, orthopaedics and general surgery. These benefits included reductions in patient mortality, faster access to treatment, shorter lengths of stay in hospital and more convenient services.

Consistent with our strategy of acknowledging competition concerns, and seeking merger clearance on customer benefit grounds, we sought a fast-track referral to a Phase 2 review by the CMA where customer benefits could be the focus of the CMA review. This also ensured a faster, lower cost review for the client.

Having achieved a clearance decision, our work on the transaction was shortlisted by Global Competition Review for European Merger Control Matter of the Year 2018.

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