Capitol Health acquisition approval

Capitol Health (ASX:CAJ) has received clearance from the Australian Competition and Consumer Commission (ACCC) for its proposed acquisition by Integral Diagnostics. The approval is contingent upon the divestiture of Capitol Health's radiology clinic in Melton, Victoria, to ensure competitive balance in the region.

Capitol Health acquisition overview

The ACCC has approved the acquisition of Capitol Health by Integral Diagnostics, contingent on the divestment of a radiology clinic in Melton, Victoria. This measure aims to preserve market competition in the region, addressing concerns about potential impacts on pricing, bulk-billing rates, and service quality. Integral Diagnostics and Capitol Health are leading providers of diagnostic imaging services across Australia. The acquisition involves 60 radiology sites in Victoria, Western Australia, Tasmania, and South Australia. The ACCC found no significant competition concerns elsewhere, as competition is expected to remain robust. This decision aligns with the legal framework under section 50 of the Competition and Consumer Act, highlighting the ACCC's commitment to maintaining competitive markets and safeguarding consumer interests.

Executive commentary on acquisition

The divestment ensures the presence of a viable competitor in the local diagnostic imaging market, maintaining competition and protecting consumer interests.