On September 20, 2023, the CCI approved an acquisition of 72.49% shareholding (on a fully diluted basis) by BCP Asia II Topco IV Pte. Ltd (‘BCP/ Acquirer’) in Quality Care India Limited (‘QCIL/Care Hospitals/ Target’) (from Touch Healthcare Private Limited (‘THPL’) (‘Proposed Combination’).
Parties to Combination
Acquirer: BCP is a newly incorporated entity and has not been engaged in providing any products/services and/or performing the business of investment holding in India or worldwide since its incorporation. It is controlled by funds advised and/or managed by affiliates of Blackstone Inc. (collectively, ‘Blackstone Group’), which operates as an investment management firm.
Target: QCIL is a multispecialty healthcare provider established in 1997. It operates a network of multi-speciality hospitals under the brand name ‘CARE Hospitals’ in various cities in India. It was also noted that the Target executed transaction documents on September 10, 2023, for the acquisition of an entity engaged in operating hospitals and medical centers/clinics.
The CCI noted that one of the portfolio companies of Blackstone Group is engaged in the supply of surgical/hospital consumables such as face masks, surgical gloves, gowns and drapes, sterilization wrap, etc. in India. Further, Care Hospitals and its downstream affiliates provide healthcare services. Therefore, the CCI concluded that activities of the portfolio company and Care Hospitals exhibit vertical interface/complementarity. However, the CCI left the relevant market open and approved the Proposed Combination for the following reasons:
i. The portfolio company of the Blackstone Group is engaged in miniscule sales to customers in India;
ii. The value of hospital/surgical consumables purchased by Care Hospitals and its downstream affiliates in FY 2022- 23 was many times of the value of total sales made by the portfolio company in India in 2022;
Even if the portfolio company sold all of its supplies to the healthcare facilities operated by Care Hospitals and its downstream affiliates, they would have to procure additional supplies from its competitors, indicating no possible foreclosure; and
iii. With regards to competitive pressures, the CCI noted that from the demand side, the products segment is characterized by presence of several players. From the supply side, the products segment is characterized by presence of other suppliers such as 3M Healthcare, Ansell, G Surgiwear, etc.