Competition authorities launch in-depth investigation into CUF's purchase of the Hospital Particular do Algarve

In the note, the Competition Authority ( AdC ) notes that it has decided to initiate an in-depth investigation into this acquisition , since it "cannot be excluded" that it "is likely to create significant obstacles to effective competition in the market for the provision of hospital healthcare by private units".

The competition regulator in Portugal points out that taking into account the national relevance of CUF and the regional importance of the HPA Saúde Group , "it is not possible, at this stage of the procedure, to rule out the possibility that the concentration operation in question could lead to a significant strengthening of negotiating power" with insurance providers and complementary subsystems.

"Such reinforcement could be reflected in a deterioration of the commercial conditions applicable to these entities, with potential negative impacts throughout the value chain, including on the costs borne by the final beneficiaries", warns the AdC, which adds that it has identified "competition law issues" in a potential elimination of potential competition.

The purchase of HPA by CUF was communicated to the Competition Authority in April and would see CUF SGPS, almost two-thirds owned by José de Mello Capital, purchase HPA, a private hospital group that owns hospital units and clinics in the Algarve, Alentejo and Autonomous Region of Madeira regions.

In the opinion of the AdC, the concentration operation under analysis "results in the acquisition, by the largest national operator, of one of the main regional operators, whose activity is concentrated in regions of the national territory where CUF, to date, has no presence".

The document states that the private hospital healthcare sector has grown in recent years, with a "significant expansion in demand, driven by the expansion of coverage provided by insurance and complementary health subsystems."

The supervisor also highlighted that the hospital healthcare sector has been marked by a process of consolidation and accompanied by a worsening of commercial conditions, with significant barriers to new entry.

The AdC insisted that this is not a final decision and that an in-depth investigation is opened when it considers further due diligence necessary and that, after this, it may decide not to oppose or prohibit the deal, with the buyer being able to accept recommendations to give the green light to deals.

Photo: HPA Health Group.