The Commerce Commission today cleared a proposal to combine the radiology services of Taranaki Healthcare Limited (THL) and Fulford Radiology Limited.

THL and Fulford Radiology propose to form a joint venture, Fulford Radiology Services Limited (FRSL). FRSL would acquire the radiology assets of THL and Fulford and combine them into one business.

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. Parties involved can apply for a clearance, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.

In this case, the clearance applied for was for FRSL to acquire the radiology assets of THL and Fulford Radiology.

Commissioner Cathie Harrison said that the Commission was satisfied that, should the acquisition go ahead, FRSL would not acquire or strengthen a dominant position in any market.

Ms Harrison said that the relevant markets in this case were those for routine radiology services and facilities in Taranaki and non-routine radiology services and facilities in the North Island.

The Commission concluded that FRSL would not be dominant, largely because of the strong buying power of purchasers. The main purchasers are the Health Funding Authority, the Accident Rehabilitation and Compensation Insurance Corporation (ACC) and insurance companies.

The HFA's national pricing framework provides only limited scope for providers of healthcare services to make changes to their pricing and output. ACC's purchasing power will, likewise, constrain the new company.

Media contact: Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz