Singaporean competition commission refuses merger of RadLink Asia and Medi-Rad Associates

The merger would result in "a substantial lessening of competition" in Singapore, the commission said in a statement.

IHH healthcare Berhad is the parent company of Parkway, a commercial supplier of radiopharmaceuticals in Singapore. A merger with RadLink Asia would mean that Parkway became the only such supplier in the country, the commission said.

"Market inquiries indicated that no potential new radiopharmaceutical supplier would enter the market in the next two to three years to compete with the merged entity," CSS said. 

"Evidence suggests that entry barriers are high, and the bargaining power of customers is weak," CSS said.

Parkway and RadLink are also one another's main competitors in the provision of radiology and imaging services for private out-patients in Singapore, and the merged entity would have a substantial market share.

Competition concerns are raised in Singapore if a merged entity will have a market share of 40% or more, or if it will have a 20-40% share and the combined market share of the three largest firms would be 70% or more, CSS said.

The vertical integration of the companies is also a concern, CSS said.

Market inquiries have "indicated that the merged entity would be able to restrict competition in the market for radiology and imaging services by controlling the supply, the prices and/or the range of radiopharmaceuticals available to its downstream competitors," it said.

Herbert Fung, director of the business and economics division of CCS, said: "CCS hopes that this decision will raise awareness of the merger assessment regime in Singapore which has been in place since 2007, so in the future when other companies are unsure, they can notify the merger transactions through CCS for an assessment and a decision."

RadLink’s parent company is Fortis Healthcare Limited. It announced on the National Stock Exchange of India that it had received the CSS decision, and will "continue to explore alternative strategic opportunities related to RadLink", ChannelNews Asia reported.

IHH said that the purchase agreement has lapsed and ceased to be of effect, ChannelNews Asia said.