Hospital operators in Schleswig-Holstein and Cologne withdraw merger notifications in two cases after Bundeskartellamt expresses concerns

In two separate merger control proceedings in the hospital sector the operators concerned have each withdrawn their notifications in second phase proceedings after the Bundeskartellamt had expressed preliminary concerns. In the one case Ameos Psychiatrie Holding GmbH, Kiel (“Ameos”), had notified the authority of its plans to acquire the majority of shares in Sana Kliniken Ostholstein GmbH, Eutin (“Sana Kliniken”). In the other case the hospital operator “Stiftung der Cellitinnen zur heiligen Maria” (“Cellitinnen Nord”) in Cologne had planned to merge with the hospital operator “Stiftung der Cellitinnen gemeinnütziger eingetragener Verein” (“Cellitinnen Süd”), also based in Cologne. Both operators belong to different religious communities of the Roman Catholic Church.

Andreas Mundt, President of the Bundeskartellamt: “Competition is an important means to ensure quality, also in the hospital sector. If patients and referring physicians have a sufficient range of alternatives, hospitals will be induced to attract patients and invest in the quality of their establishments. Most of the hospital mergers notified to the Bundeskartellamt in recent years were cleared. However, according to our preliminary assessment, the planned hospital mergers both in Schleswig-Holstein and Cologne would have greatly limited choice for local patients.” 

On 18 March 2019 Ameos withdrew its notification after the Bundeskartellamt had informed the company of its competition concerns. If the merger had been implemented, all the somatic hospitals in the north German Ostholstein market would have been controlled by the Carlyle Group, a private equity company based in Washington, D.C. (USA). The acquiring company Ameos and the main competitor of Sana Kliniken, namely Schön Klinik SE, Prien, are portfolio companies of two different investment funds. Both funds are operated and controlled by the Carlyle Group. With a market share in Ostholstein of over 50% of the cases in the acute inpatient sector and a very large lead over other hospitals outside the market area, Ameos, the Schön Klinik Neustadt which is associated with Ameos via the Carlyle Group, and the Sana Kliniken would have held a dominant position.

In the second merger case both hospital operators in Cologne already withdrew their notification on 17 December 2018. The merger would have created by far the largest hospital group in the City of Cologne.

Intensive investigations have also shown that the operator "Cellitinnen Nord" already had a dominant position in the “Cologne north - left Rhine bank” market area even before the planned merger.  In 2017 they treated over 50% of the patients in the market area in their four hospitals. The two hospital operators are close competitors especially on the left Rhine bank of Cologne, in particular in the north of the city. This was also confirmed by a survey among physicians in Cologne and Hürth. By merging with the "Cellitinnen Süd", the operator "Cellitinnen Nord" would have significantly expanded its leading position in the market area with a total of seven general hospitals.

The assessment of each of the two merger projects was based on 14 million patient case data. The notifications of these mergers were withdrawn after the Bundeskartellamt had informed the parties in writing of its preliminary competition concerns about the projects (statement of objections). Due to the withdrawal of the notifications, the merger proceedings were concluded without a final decision by the Bundeskartellamt. Both mergers cannot therefore be implemented.

Further information on the proposed merger of the two Cellitine hospital operators is available in a case summary (in German) on the Bundeskartellamt’s website.