(Reuters) – Australia’s competition watchdog on Thursday raised concerns over Australian Clinical Labs’ A$1.52 billion ($1.03 billion) buyout offer for medical centre operator Healius, which had rejected the proposal in May.
The Australian Competition and Consumer Commission (ACCC) said the acquisition would lessen competition in the pathology services markets.
“The significant reduction in competition could lead to adverse consequences for patients, including reduced levels of bulk billing, higher co-payments for privately billed services, collection centre closures, less frequent collection of samples, or longer turnaround times,” ACCC Commissioner Stephen Ridgeway said in a statement.
In a separate statement, Healius said that given the concerns raised by the ACCC, it is unlikely the regulator would give clearance for a deal to go through.
Healius’ board continues to recommend its shareholders to reject the offer on the table.
Australian Clinical Labs, one of the country’s largest pathology services providers, has been pursuing Healius shareholders to accept its offer after they rejected its bid, saying it had “no cash and no premium” and was “plainly inadequate.”
The ACCC statement was expected due to the nature of the acquisition, Australian Clinical Labs said.
($1 = 1.4775 Australian dollars)
(Reporting by Navya Mittal in Bengaluru; additional reporting by Harish Sridharan; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)
