Total
0
Shares
ACCC Chair Rod Sims. Source: Kym Smith/News Corp Australia.
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Australia’s Federal Court has granted the ACCC an interlocutory injunction to temporarily stop Virtus Health (VRT) from acquiring a string of fertility clinics
  • The two companies had previously said they would go ahead with the transaction despite the ACCC’s review not being completed
  • However, the injunction will stop the deal until the ACCC’s proceedings have been finalised or another order is brought by the Court
  • Concerns raised by the ACCC include a significantly increased market share for Virtus, which could lead to decreased competition and an increase in IVF prices
  • Shares in Virtus Health are down 0.38 per cent to $5.29, while Healius is up 0.2 per cent to $4.95

Australia’s Federal Court has granted the ACCC an interlocutory injunction to temporarily stop Virtus Health (VRT) from acquiring a string of fertility clinics.

Collectively operating as Adora Fertility, the clinics are currently owned by fellow ASX-lister Healius (HLS). Both Virtus and Healius are considered leading providers of IVF services, and both operate clinics in Brisbane, Sydney and Melbourne.

On August 30, Virtus notified the Australian Competition and Consumer Commission (ACCC) of its intention to acquire Adora, along with three day hospitals, from Healius for $45 million — a notice the ACCC said “provided very limited information”.

The ACCC subsequently launched a public review of the transaction on September 21, having previously told Virtus that it was not able to grant early merger clearance.

However, citing the “imperatives necessitating prompt completion of the acquisition,” Virtus and Healius said they would complete the transaction anyway, despite the fact the ACCC’s review will not have been completed.

But with the injunction in hand, that transaction has been blocked until the proceedings brought by the ACCC are finalised, or further Court order issued.

“We welcome the Court’s order to stop Virtus Health from going ahead with this acquisition before the Court has had an opportunity to hear evidence and make a decision on whether the acquisition is likely to substantially lessen competition,” ACCC Chair Rod Sims said.

According to the ACCC, the acquisition would increase Virtus’ already substantial market share in Brisbane and Melbourne, with further concerns raised over changes to the market in Sydney.

In addition, the ACCC argues that Adora has been a “vigorous” competitor, pushing prices for IVF services lower through its low-cost model.

“A reduction in competition is likely to result in increased IVF prices, adding to the financial impact on consumers seeking to fulfil their wish for having children,” Mr Sims said earlier this month, noting that it was already an expensive and difficult process.

Shares in Virtus Health were down 0.38 per cent to $5.29, while Healius is up 0.2 per cent to $4.95 at 2:21 pm AEDT.

VRT by the numbers
More From The Market Herald
Arovella Therapeutics (ASX:ALA) - CEO and Managing Director, Dr Michael Baker

" Arovella Therapeutics (ASX:ALA) receives $524,000 R&D tax refund

Arovella Therapeutics (ALA) has received a refund from the Australian Taxation Office (ATO) of just over $524,000 for the financial year.

" FijiKava (ASX:FIJ) raises $2.67m via SPP

Australian-Fijian health and wellness company FijiKava (FIJ) has raised $2,679,000 via its share purchase plan (SPP).
ResApp Health (ASX:RAP) - CEO & Managing Director, Dr Tony Keating

" ResApp Health (ASX:RAP) achieves regulatory approvals for cough counter application

ResApp Health (RAP) has achieved Australian Therapeutics Good Administration clearance and CE Mark certification for its cough counter smartphone application.
Artrya (ASX:AYA) - MD John Barrington (left) and Executive Director John Konstantopoulos (right)

" Cardiac imaging software company Artrya (ASX:AYA) up on public debut

Artrya (AYA), an artificial intelligence medical technology business, has started trading on the ASX after the successful completion of its initial public offering