ACCC may force more Ramsay sales

By Marc Moncrief
July 2, 2005

The competition watchdog may force Ramsay Health Care, which is set to become the nation's largest operator of private hospitals, to sell more hospitals than it expected when it acquired rival Affinity Health earlier this year.

Ramsay Health Care managing director Pat Grier said that when Ramsay bought Affinity in April for $1.4 billion, it foresaw that the Australian Competition and Consumer Commission might force it to resell at least 14 of the 45 hospitals it acquired.

To appease the ACCC, Ramsay signed a non-binding agreement to sell the hospitals to Affinity's shareholders, CVC Asia Pacific and Ironbridge Capital, for $406 million. But it also flagged that more divestments might have to be made.

In a Statement of Issues paper released yesterday, the ACCC said Ramsay might have to sell five additional hospitals to ensure competition standards were met. ACCC chairman Graeme Samuel said the regulator would reserve its final position until it received a response from interested parties.

"The whole object of that Statement of Issues is to have interested stakeholders focus on the specific matters that might cause us concern," Mr Samuel said.

The five new hospitals named in the ACCC's Statement of Issues are Wangaratta private hospital in north-east Victoria, either the North Gosford or Berkley Vale on the NSW central coast, the Warners Bay or Lingard in Newcastle, the Sunnybank in Brisbane, and either the Belmont or New Farm in Brisbane.
