FTC Successfully Challenges ProMedica-St. Luke’s Merger

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On December 5, 2011, the FTC obtained an administrative decision that requires ProMedica to divest itself of St. Luke’s Hospital. The Administrative Law Judge (ALJ)’s 246-page opinion, which was released to the public on January 5, 2012, is available at: http://www.ftc.gov/os/adjpro/d9346/120105promedicadecision.pdf. Although this case is only the second filed FTC hospital merger challenge since 2007, it is part of a series of recent cases brought by the FTC in the healthcare sector, indicating a continuing trend of heightened FTC scrutiny of provider combinations.

ProMedica acquired St. Luke’s in August 2010 in a non-reportable acquisition. In January 2011, the FTC announced its intent to challenge the deal, 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, and 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.

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Published In: Antitrust & Trade Regulation Updates, Business Organization Updates, Health Updates, Mergers & Acquisitions Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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