IVF deal delayed
Regulators want to block one of Australia’s major IVFs clinics from buying another.
The Australian Competition and Consumer Commission (ACCC) has filed proceedings in the Federal Court seeking to stop Virtus Health’s acquisition of Adora Fertility from Healius Limited.
Virtus and Adora are leading providers of IVF services. Both companies operate fertility clinics in Brisbane, Sydney and Melbourne.
The two companies have told the ACCC they are ready to complete the transaction, despite the ACCC’s review of the deal not having been completed. This came after Virtus was criticised for providing very limited information to the ACCC ahead of the acquisition.
The Federal Court has ordered that the deal be delayed until it hears the ACCC’s application for an interlocutory injunction on October 19.
“By proceeding with the transaction while the ACCC is in the very early stages of a public review, the parties have shown complete disregard for the usual merger assessment processes in Australia,” ACCC chair Rod Sims said ahead of the court order.
The regulator found that the acquisition would increase Virtus’ already significant market share in Brisbane and Melbourne. It says concerns may also arise in relation to the change in market shares in Sydney.
“In addition to the apparent increase in market concentration, there are strong indications that Adora has been a vigorous competitor, driving down prices for IVF services through a low-cost model,” the ACCC said in an official statement.
“Fertility treatment is an expensive and difficult process. A reduction in competition is likely to result in increased IVF prices, adding to the financial impact on consumers seeking to fulfil their wish for having children,” Mr Sims said.
“Seeking an urgent injunction to restrain completion of a transaction is a significant step for the ACCC to take but was required in these circumstances where the parties have not been prepared to allow the ACCC adequate time to finalise its merger review.”