Integral Diagnostics and Capitol Health shares climb after ACCC approves merger
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More news: Shares in Integral Diagnostics and Capitol Health both gained in morning trade on the ASX after the competition regulator said it will not oppose a proposed merger of the two medical imaging companies, after accepting a court-enforceable undertaking.
Integral Diagnostics shares were up 1.72% to $2.95 by 10:58am AEDT, extending gains of nearly 60% over the last 12 months. Capitol Health shares were also up 1.35% to 38 cents, having advanced around 60% since January.
ACCC green lights Integral Diagnostics merger with Capitol Health
The news: The Australian Competition and Consumer Commission (ACCC) will not oppose Integral Diagnostics' proposed merger with Capitol Health after accepting a court-enforceable undertaking.
The numbers: As part of the acquisition, announced in June, Integral Diagnostics will acquire 60 radiology sites across Victoria, Western Australia, Tasmania and South Australia.
The context: The ACCC approved an undertaking as part of the deal between the two ASX-listed medical imaging companies, which requires Integral Diagnostics to divest Capitol Health's radiology clinic in the Melton region of Victoria to a purchaser approved by the regulator.
The ACCC's investigation found that alternative general diagnostic imaging providers and the threat of new entry of expansion would be unlikely to provide an effective competitive constraint on Integral Diagnostics in the Melton region.
The regulator said that the divestiture will allow for a viable and effective competitor in general diagnostic imaging services in the area. It is also satisfied that the proposed acquisition is unlikely to raise substantial competition concerns in other areas.
The companies will now apply to the Federal Court for the formal orders to approve the scheme of arrangement to effect the merger. Integral expects the merger will be implemented on 20 December.
What they said: "Without the divestment, the proposed acquisition would bring together two of three providers of general diagnostic imaging services in the Melton region," said ACCC commissioner Philip Williams.
"This could have resulted in increased prices, reduced bulk-billing rates or reduced quality for patients in the local area."
The sources: ASX announcement, ASX announcement
