The Emis Group Plc (LON: EMIS) share price rallied 25% after the UK Competition and Markets Authority (CMA) provisionally approved its £1.2bn merger with United Health. The tie-up, announced in June 2022, has taken a long time to get to this point, with the CMA promising to deliver its final verdict by 5 October 2023.
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The takeover had been subject to significant scrutiny by the UK’s CMA, which launched a phase 2 merger investigation on 31 March 2023, with the provisional decision being revealed today. The expert panel advising the deeper Phase 2 probe provisionally found the merger does not raise competition concerns.
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Some of the concerns raised by the CMA included the likelihood that the two companies would merge the services they provide and engage in anti-competitive behaviour.
EMIS supplies the data management systems doctors use under the UK National Health Service (NHS) for electronic patient records. UnitedHealth's Optum division supplies software GPs use when prescribing medicines, data analytics, and advisory services to the NHS.
The CMA was afraid that Optum and its competitors could use the data that EMIS holds and integrate their software with EMIS’s electronic patient record system to compete in other markets, such as medicines optimisation software and the supply of population health management services.
The Bidco and EMIS were pleased to announce that the CMA has provisionally cleared the Acquisition. The CMA will publicly consult on the Provisional Findings before reaching a final decision by 5 October 2023.
The expert panel carrying out the deeper phase 2 investigation said that Optum “would not, in practice, be able to use the EMIS business to harm the competitiveness of rivals. Primarily because the NHS could use its oversight role to prevent the merged business from pursuing this strategy”.
As for the medicines optimisation software, the panel provisionally found that it would not be commercially beneficial for the merged business to restrict access to EMIS’s electronic patient record system.
The EMIS Group share price.
The EMIS Group share price rallied 25% to trade at £19.06, from Thursday’s closing price of £15.23.
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