Tribunal seeks to block Mediclinic’s acquisition of North West hospitals

An ambulance enters the Mediclinic Heart Hospital. Picture: SOWETAN/SUNDAY WORLD/TSHEKO KABISIA
An ambulance enters the Mediclinic Heart Hospital. Picture: SOWETAN/SUNDAY WORLD/TSHEKO KABISIA

The Competition Tribunal has asked the Constitutional Court for leave to appeal a ruling allowing Mediclinic to acquire hospitals in the North West, the private hospital group said on Friday.

In February the Competition Appeal Court had ruled in favour of the hospital group, after it appealed a decision by the Competition Tribunal to block its acquisition of Matlosana Medical Health Services (MMHS).

Mediclinic’s plans to acquire Klerksdorp-based MMHS had been blocked by the Competition Commission in 2019, which said at the time should the acquisition proceed there would be substantial lessening of competition in the area and prices that were likely to rise.

The tribunal had said if the transaction was approved it would increase costs for both medical scheme members and patients who paid their own bills, and that it had evidence Mediclinic had previously attempted to leverage its dominance in one geographic region where it did not face much competition.

Mediclinic said on Friday it had filed an answering affidavit opposing the application for leave to appeal, and would participate if the matter was set down for a hearing.

In a trading update on Friday, Mediclinic said group revenue for its year to end-March was largely in line with expectations. In constant-currency terms, revenue had risen about 4% from the prior comparative period’s £2.9bn (R67bn).

Mediclinic CFO Jurgens Myburgh said on Friday that March was typically a busy month in terms of elective surgeries, and therefore lockdowns related to the Covid-19 pandemic had already had an effect on the group's results.

This is also expected to have a severe effect on its 2021 financial year, the group said.

Mediclinic CEO Ronnie van der Merwe said the group's current priority was dealing with the pandemic, but expected many delayed elective surgeries to be rescheduled once the peak of the outbreak passed.

The group is cutting capital expenditure and other spending to shore up its balance sheet, saying it would give further details during the release of its forthcoming results, scheduled for May.

In morning trade on Friday, Mediclinic's share price was down 0.16% at R61.90.

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