Antitrust watchdog may approve acquisition of Fresenius clinics if firms accept divestitures to address public healthcare system SUS and insurer market risks.
Brazil’s antitrust agency CADE is set to decide this week on DaVita’s proposed acquisition of Brasnefro, a division of Fresenius Medical Care. While CADE’s General Superintendence has recommended blocking the deal due to antitrust concerns, there’s growing speculation that a settlement allowing the merger under certain conditions could be negotiated with CADE’s Tribunal.
The Tribunal will review the case on Wednesday, and the companies are reportedly considering a Concentration Control Agreement (ACC) to resolve regulatory concerns. This type of agreement could include structural remedies, such as divesting specific dialysis units, to address competitive imbalances.
Competitors like Nefrostar and Diaverum argue the merger would give DaVita excessive market dominance, potentially undermining competition and leading to higher prices or reduced access for both public and private patients. The combined company would serve far more patients than any other provider, particularly in chronic dialysis care.
CADE’s technical analysis focused on risks to competition in chronic dialysis services, not hospital-based treatments. The watchdog identified potential harm in several major markets, including São Paulo, Rio de Janeiro, Recife, Brasília, and João Pessoa, where DaVita could gain disproportionate influence over SUS and private insurers.
The case was postponed in a prior session to give time for a possible settlement. However, the technical team argues that no remedies proposed so far are sufficient to eliminate the competitive risks, casting doubt on the viability of any deal without significant divestments.
Despite the opposition, CADE’s Tribunal has the final say and may approve a negotiated settlement. DaVita maintains the deal will enhance continuity of care and access to treatment. However, experts note that any proposed structural remedies must be practical and include willing buyers for divested assets to be effective.
Source: Valor International
