Cade approves purchase of São Bernardo Saúde by Athena Saúde

Cade approves purchase of São Bernardo Saúde by Athena Saúde


The Administrative Council for Economic Defense approved the acquisition by Athena Saúde Espírito Santo of the control of companies belonging to the São Bernardo Group, on the 17th of June. The operation received the endorsement of the municipality by signing a Concentration Control Agreement (ACC).

During the analysis of the case, Cade's General Superintendence identified competition concerns arising from the merger. However, advisor-rapporteur Luiz Hoffmann, supported by the Court, considered that remedies of a structural and behavioural nature present in the agreement are sufficient to solve the potential problems pointed out.

Athena Saúde has four health plan operators serving Espírito Santo, Paraná and Piauí, with almost 500 thousand beneficiaries, in addition to nine hospitals and 47 clinics. São Bernardo Saúde, in turn, is a regional company, focused on Espírito Santo.
The Superintendence-General's analysis identified competitive concerns in the collective health insurance market, especially business ones, encompassing 68 municipalities in Espírito Santo, focusing on the study in 26 groups of municipalities where the concentration was higher, concluding that the act was challenged. 

In line with SG's understanding, understood that the transaction would lead to concentrations in several affected groups, which, together with the barriers to entry and the low rivalry existing in the relevant markets, would make the exercise of market power of the companies likely. 

To solve the competition problems pointed out, the companies signed an agreement with CADE. Through the ACC, claimants undertake to sell part of their collective business plan portfolios to a competing Health Plan Operator where concerns have been identified. "This structural remedy aims to make the portfolio buyer be divested an effective rival of SAMP in the said markets, to mitigate the elimination of competition caused by the withdrawal of SBS (which will become an integral part of the Athena ES Group)", consigned Hoffmann in his vote.

In addition, after the agreement, the companies will not recruit employees from the purchasing operator; will not compete directly with the buyer for the divested business; will not offer the possibility of accreditation of applicants' hospitals by competing health plan operators, and notify Cade of a merger involving its economic group in the health insurance markets in the state of Espírito Santo. The ACC also establishes the role of a trustee (independent third party) to monitor and ensure compliance with the established obligations. "I believe that the proposed remedies are necessary and satisfactory, having the ability to mitigate the concerns arising from this concentration act, and being in line with the requirements of proportionality, timeliness, feasibility and verifiability, according to the guidelines of the Antitrust Remedies Guide of this Council", concluded the advisor.