Mediclinic to acquire North West hospitals after winning court appeal

Private hospital group Mediclinic said on Friday that it had won its appeal against the Competition Tribunal’s prohibition of its proposed acquisition of Matlosana Medical Health Services (MMHS) in the North West province.

Mediclinic’s plans to acquire Klerksdorp-based MMHS had been blocked by the Competition Commission, which said at the time should the acquisition proceed, there would be substantial lessening of competition in the area, and prices were likely to rise.

The Competition Tribunal had upheld the commission’s recommendation in early 2019.

The tribunal had said if the transaction was approved it would increase costs for both medical scheme members and patients who paid their own bills, and that it had evidence Mediclinic had previously attempted to leverage its dominance in one geographic region where it did not face much competition.

MMHS grants significantly larger discounts than Mediclinic on ward and theatre fees to patients who do not belong to medical schemes, and should the deal be permitted, these uninsured patients would have to pay higher rates, the tribunal said at the time.

The matter was then referred to the Competition Appeal Court, which ruled in Mediclinic’s favour.

Mediclinic said on Friday that it was focused on delivering accessible, quality care at the best possible value for its patients.

“We are delighted to expand our current care offering within the North West Province of SA. Mediclinic remains focused on delivering high-quality health-care services across the continuum of care and an excellent client experience,” said CEO Koert Pretorius in a statement on Friday.

The acquisition includes two multidisciplinary hospitals namely the 185-bed Wilmed Park Hospital and the 62-bed Sunningdale Hospital. In addition, the acquisition includes a 51% share in the 50-bed Parkmed Neuro Clinic psychiatric hospital.

The acquisition is expected to become effective around the middle of 2020, Medclinic said.

In afternoon trade on Friday Mediclinic’s share price was up 1.93% to R75, having fallen about 44% over the past three years.

Correction: February 7 2020

An earlier version of this article referred to the movement in Mediclinic’s share price in 2019, this should have been 2020.

gernetzkyk@businesslive.co.za

With Tamar Kahn