On 1 August 2017 the CMA announced that it had cleared the anticipated merger between Central Manchester University Hospitals NHS Foundation Trust and University Hospital of South Manchester NHS Foundation Trust. The CMA launched its merger inquiry in February 2017 and referred the merger to Phase II in accordance with the parties’ request for a fast-track reference.
In its final report issued on 3 August 2017, the CMA concluded that the merger may be expected to give rise to a substantial lessening of competition (SLC) in NHS elective and maternity services and NHS specialised services. Although it considered that any adverse effect resulting from such an SLC was likely to be significantly constrained by, amongst other things, recent policy developments, the devolution of health and social care in Greater Manchester and increased regulatory oversight of the merging parties, the CMA concluded that the only practicable and effective remedy to the SLC was prohibition. Partial divestiture was not considered a practicable and effective remedy given the difficulty of divesting individual clinical services. Neither would behavioural remedies be practicable and effective as any such remedy may be unlikely to address the SLC and adverse effects at source and may not be effective in mitigating the SLC or its adverse effects.
The CMA found, however, that there would be 11 relevant customer benefits (RCBs) within the meaning of section 30 of the EA02 likely to represent improvements in patient outcomes, including reductions in patient mortality, clinical complications and infection rates. Such RCBs were expected to accrue within a reasonable period of the merger and were unlikely to accrue without it. The CMA also found that the merger was likely to improve patient access and patients’ choice of location for treatment in respect of certain services and a significant number of patients. The CMA received advice from NHS Improvement and consulted with local commissioners, local authorities and the devolved health and social care body in Manchester and NHS England, all of whom expressed strong support for the merger. The CMA concluded that the benefits of the RCBs that would be lost as a result of prohibition were substantially greater than the adverse effects of any SLC and consequently cleared the merger.