Acadia Healthcare Company CMA Investigation
First published by Admin on August 11, 2016 in the following categories: Latest
On 16 February 2016, Acadia Healthcare Company acquired the entire share capital of Priory Group No.1 Ltd. It was announced later on in July 2016 by the Competition and Markets Authority (CMA) that they would be investigating the acquisition of the company as they believed that that it would lead to a lessening of competition.
These sorts of investigations by the CMA are very common because they can lead to serious reductions of competition in the market .
About the companies
Acadia Healthcare Company Inc supply a number of outpatient mental healthcare services to local authorities and NHS organisation across the UK and Wales. Priory Group No.1 Limited also sell outpatient mental healthcare services to some of the same organisations as Acadia Healthcare Company.
The companies overlap in 21 cases over 5 mental healthcare services that both companies provide to, which has triggered the investigation.
Patients that require outpatient mental healthcare services are referred to private providers when the NHS are unable to admit a patient close to their home. As Acadia Healthcare Company and Priory Group No.1 are the two largest private providers of these service in the UK, the CMA were worried that this merger could cause a reduction in competition within the market.
By merging, it has meant that in each area that they provided now has a reduced choice of providers.
The investigation
Due to the CMA concerns, the merger will be going through an in-depth investigation. However, Acadia Healthcare Company has offered to sell Priory Group No.1, or their subsidiary Partnership in Care hospitals as a formal undertaking.
The Competition and Markets Authority have until the 23 of September 2016 to decide whether the undertakings that Acadia Healthcare Company are offering are reasonable and whether it is something that they would accept. If they refuse to accept the offer, the investigation will go ahead.