Merger between two health care institutions in the south of the Netherlands requires license

Having conducted a first investigation, the Netherlands Competition Authority (NMa) has concluded that a merger between two mental health care institutions in the Dutch province of Noord-Brabant could impede competition on the markets of clinical and non-clinical mental health care for adults and seniors, and on the market of non-clinical mental health care for children and young people. The two institutions that intend to merge are Stichting Geestelijke Gezondheidszorg Oost Brabant (GGZ Oost Brabant) and Stichting Reinier van Arkel. Based on its first investigation, the NMa has decided that a license is required for the merger to go through. The NMa will therefore further investigate what effects the planned merger might have on competition.

With regard to the market of mental health care for adults and seniors, the NMa's main concerns are about the reduction of alternatives for patients in two neighboring regions in the eastern part of the province. In each of these regions, one of the two institutions is active.

As with other markets in the health care industry, which is currently undergoing a transition, so too will the market for clinical and non-clinical mental health care see more competition and a higher level of transparency. This means that, sometime in the future, patients might have more incentives to opt for a mental health care institution outside their local area. However, if the merger were to go through as originally planned, patients in each region would lose their most logical alternative, which would be the institution in their neighboring region. Effective competition could thus be significantly impeded.

The NMa's further investigation will therefore focus on the question to what extent other mental health care institutions are able to exert competitive pressure, and on the question whether there will be enough alternatives left for patients in the eastern part of the province. On the market of non-clinical mental health care for children and young people, the activities of both institutions have a considerable geographical overlap. In the service areas of these institutions, competitors are significantly smaller. The further investigation will surely provide a clearer picture of the competitive situation on the market.

Should the institutions apply for a license, the NMa is then required to issue a decision within 13 weeks on whether the concentration is allowed or not. When reviewing mergers and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a dominant position can have negative effects on the price, quality and range of the products or services offered on the market. The NMa could then attach conditions to a merger, or it could prohibit the merger.