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CMA provisionally approves £1.2Bn EMIS merger with UnitedHealth, shares rally 25%




Exec Summary:


The Competition and Markets Authority (CMA) has provisionally approved the proposed merger of EMIS Group and UnitedHealth Group. The CMA's Phase 2 investigation found that the merger is not expected to harm competition or adversely affect patients.


The CMA's investigation looked at a number of factors, including the market for electronic patient records (EPRs) used by GPs in the UK. The CMA found that EMIS and UnitedHealth are not the only providers of EPRs to GPs, and that there are a number of other viable competitors. The CMA also found that the merger is unlikely to lead to higher prices or reduced innovation in the EPR market.


The CMA's provisional approval is subject to a consultation period, during which interested parties can provide feedback. The CMA will then make a final decision on the merger in October 2023.


The merger of EMIS and UnitedHealth would create a major player in the UK healthcare IT market. UnitedHealth is a large healthcare company that provides a range of services, including insurance, healthcare delivery, and technology. EMIS is a leading provider of healthcare IT solutions to the NHS and other healthcare providers in the UK. The merger would create a company with a strong presence in both the public and private healthcare sectors.

The merger has been met with mixed reactions. Some have expressed concerns that it could lead to higher prices and reduced innovation in the healthcare IT market. Others have argued that the merger would be beneficial for patients, as it would create a more integrated and efficient healthcare system. The CMA's provisional approval is a positive step for the merger, but it remains to be seen whether it will be ultimately approved.

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EMIS Share Price:


EMIS shares rose more than 25% in today's trading after the UK Competition and Markets Authority (CMA) provisionally approved its £1.2 Billion merger with United Health.



The Competition and Markets Authority (CMA) statement:


"The Competition and Markets Authority (CMA) has provisionally cleared UnitedHealth’s proposed £1.2bn purchase of EMIS following an in-depth investigation.


The NHS is increasingly seeking digital and data-driven solutions to help improve the delivery of healthcare in the UK. EMIS supplies data management systems to the NHS, including the electronic patient record system used by the majority of NHS GPs in the UK. Optum, part of the US healthcare giant UnitedHealth, currently supplies software used by GPs when prescribing medicines, as well as data analytics and advisory services that the NHS uses to help improve overall healthcare and health service provision.


While the merging businesses do not supply competing services, Optum and its competitors use the data that EMIS holds and integrate their own software with EMIS’s electronic patient record system to compete in other markets, including the supply of population health management services and medicines optimisation software.


A CMA Phase 1 investigation had identified initial concerns that the merger ran the risk of worse outcomes for the NHS by reducing competition. These concerns have been probed in more detail in a Phase 2 investigation overseen by an independent panel which has now provisionally found the merger does not raise competition concerns.


The investigation confirmed that EMIS, as the lead supplier to NHS GPs across the UK, holds a particularly strong market position in the supply of electronic patient record systems but, further evidence-gathering and analysis found the combination of this position with Optum’s activities should not present competition concerns.


In the supply of population health management services, the independent panel provisionally found that the merged business would not, in practice, be able to use the EMIS business to harm the competitiveness of rivals. This is primarily because the NHS would be able to use its oversight role to prevent the merged business from pursuing this kind of strategy.


In relation to the supply of medicines optimisation software, the independent panel has provisionally found that it would not be commercially beneficial for the merged business to restrict access to EMIS’s electronic patient record system. In particular, a more detailed analysis of the market shows that such a strategy would likely be unprofitable with any possible gains being limited and capable of being reduced through intervention by the NHS.


Kirstin Baker, chair of the independent inquiry panel carrying out the investigation, said:


“Digital technology and data analytics play an increasingly important role in supporting high quality healthcare in the NHS and so it’s important we investigate this deal thoroughly.


“We want to ensure the NHS continues to benefit from innovation and efficiencies brought about by technology services competing for its business. After carefully considering a broad range of evidence, we have provisionally found that this deal is not expected to harm competition or adversely affect patients.”


Today’s findings are provisional, and the CMA will now consult on its findings and listen to any further views before reaching a final decision.


The CMA welcomes responses from interested parties to its provisional findings by Friday 1 September 2023. These will be considered ahead of the CMA issuing its final report, which is due by 5 October 2023."





Engage with the HealthTech Community


HealthTech M&A Newsletter from Nelson Advisors - Market Insights & Analysis for Founders & Investors. Subscribe today! https://lnkd.in/e5hTp_xb


HealthTech M&A Advisory by Founders for Founders, Owners & Investors. Buy Side, Sell Side, Growth and Strategy mandates - Email lloyd@nelsonadvisors.co.uk


HealthTech Thought Leadership from Nelson Advisors - Industry Insights & Analysis for Founders, Owners & Investors. Visit https://www.healthcare.digital



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