Federal Trade Commission Upholds Challenge to ProMedica’s Acquisition of St. Luke’s


On March 28, 2012, the FTC upheld the Administrative Law Judge (ALJ)’s December 5, 2011 administrative decision that required ProMedica to divest itself of St. Luke’s Hospital by a vote of 4-0. This case is part of a series of recent cases brought by the FTC in the health care sector, indicating a continuing trend of heightened FTC scrutiny of provider combinations.

Toledo, Ohio-based ProMedica acquired St. Luke’s, located in Maumee, Ohio, in August 2010 in a non-reportable acquisition. In January 2011, the FTC announced its intent to challenge the $156 million acquisition, which, according to the FTC, gave ProMedica control of nearly 60% of the market for general acute-care inpatient hospital services and over 80% of the market for obstetrical services. In March 2011, the U.S. District Court for the Northern District of Ohio enjoined the transaction. On December 5, following a full administrative trial on the merits, an ALJ concluded that the transaction would “substantially lessen competition,” in violation of Section 7 of the Clayton Act. ProMedica appeals that decision to the Commission (currently there are four FTC Commissioners).

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