The US FTC requires an unusual method of testing for a less anticompetitive purchaser by offering the sale before completing the requisite due diligence, then clearing the merger in the acute care facilities industry (King’s Daughters Hospital / Scott & White)

Healthcare reform and concerns about consolidation in the health care industry juxtaposed with continuing economic distress provided a fascinating backdrop for the Federal Trade Commission’s (FTC's) recent investigation of Scott & White Healthcare’s consummated acquisition of King’s Daughters Hospital. Although the FTC ultimately declined to challenge the transaction, the investigation demonstrates the FTC’s willingness to review and potentially challenge nonreportable, consummated mergers, and its concern to preserve competition in local health care markets. The investigation is also notable for the “unusual and creative” approach that the FTC took to assess whether or not there was a credible, less anticompetitive purchaser for King’s Daughters, and thus whether the parties could avail

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Authors

  • Milbank, Tweed, Hadley & McCloy (New York)
  • Jones Day (San Francisco)

Quotation

Fiona A. Schaeffer, Ausra Deluard, The US FTC requires an unusual method of testing for a less anticompetitive purchaser by offering the sale before completing the requisite due diligence, then clearing the merger in the acute care facilities industry (King’s Daughters Hospital / Scott & White), 23 December 2009, e-Competitions December 2009, Art. N° 53245

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