CADE’s new study analyzes the consolidation of economic groups and the effects of vertical integrations in the healthcare sector


This Tuesday (January 11), the Administrative Council for Economic Defense (CADE) issued an update of their study on mergers and acquisitions in the markets of healthcare plans, hospitals, and diagnostics in Brazil. The study is part of a series of publications – called “CADE’s Notebooks” – prepared by the Brazilian antitrust agency with the goal of presenting and systematizing the authority’s jurisprudence in specific markets. In summary, the study pointed out the following:

  • Concerns related to acquisitions of cross-shareholdings between rivals operating in the healthcare sector, even minor ones, since the investing company may gain access to information about strategic and operational moves of the invested company.
  • Relevance of rivalry analysis: the number of existing competitors, idle capacity, market shares, and the existence of specific market regulations, since these markets are highly impacted by sectorial regulation.
  • Considerable increase in vertical integrations and portfolio effects, involving the healthcare market, given the increasing consolidation of players in the sector. There are constant concerns, regarding market foreclosure to the extent that some transactions might have the effect of preventing or hindering the development of activities by competitors that are not vertically integrated or part of a complementary portfolio.
  • The increase of notifiable cases in recent years: when the first peaks occurred, the average recorded was 15 cases annually between 2008 to 2012. However,  the annual average doubled to 31 cases from 2018 to 2021, reaching a peak of 48 filed transactions in 2020.

Considering all of the aspects mentioned above, CADE indicates that it is closely watching the particularities and the recent changes in the sector to ensure the promotion of free competition in the healthcare sector.

The full study in Portuguese can be viewed here.