Join our daily newsletter At The Bell to receive exclusive market insights
- EBOS Group’s (EBO) proposed acquisition of Australian Pacific Health Supplies cleared by the Australian Competition & Consumer Commission (ACCC)
- The ACCC considered whether the acquisition would enable EBOS to engage in anti-competitive bundling or tying of medical products
- However, it found that hospitals and clinicians can generally switch to alternative suppliers, meaning an anti-competitive bundling or tying strategy is unlikely to be successful
- EBO shares closed down 2.46 per cent, trading at $36.14
EBOS Group’s (EBO) proposed acquisition of Australian Pacific Health Supplies and its subsidiaries will not be opposed by the Australian Competition & Consumer Commission (ACCC).
The commission considered whether the proposed acquisition would enable EBOS to foreclose competitors by increasing its ability and incentive to engage in anti-competitive bundling or tying of medical products.
However, the ACCC found that hospitals and clinicians can generally switch to alternative suppliers, meaning an anti-competitive bundling or tying strategy is unlikely to be successful.
EBOS proposed the acquisition through its subsidiary EBOS Medical Devices Australia.
The ACCC had found that the majority of both companies’ offerings are complementary and not in direct competition.
“We concluded that EBOS and Pacific Health Group would continue to face strong competition from several other distributors and manufacturers of these medical devices,” said ACCC Commissioner Stephen Ridgeway.
“Market feedback also indicated that individual clinicians decide on the most appropriate medical device for patient outcome and that the proposed acquisition would not change this.
“We do not consider that the proposed acquisition will enable EBOS to foreclose rival suppliers by leveraging, bundling or tying its products.”
The ACCC focused on the overlap in certain medical devices often used in spinal and orthopaedic surgery that both companies distribute. These include cervical replacement discs and devices used as bone alternatives to promote bone formation and healing, such as human tissue allografts and synthetic biologics.
Public and private hospital customers, industry bodies and competitor distributors and manufacturers were consulted in the ACCC’s review, and most of them did not express concerns regarding the proposed acquisition.
EBO shares were down 2.46 per cent, trading at $36.14 at market close.
