Circle Health Group has offered to sell its BMI Edgbaston hospital to allay competition concerns about potential private hospital dominance in the region following its merger with BMI Healthcare.
The move has been provisionally accepted by the Competition and Markets Authority (CMA) after Circle was unable to sell the Circle Birmingham hospital despite offering improved terms during a second attempted sales process.
The Practice Plus Group (PPG) has made and agreement with Circle to buy the hospital which has been provisionally approved by the CMA, pending the outcome of its consultation.
The amended process may finally complete Circle’s takeover of BMI Healthcare which has been ongoing for almost four years.
Bath and Birmingham hospital sales
The hospital sale was deemed necessary after the CMA raised concerns about Circle’s potential dominance of private healthcare facilities in Bath and Birmingham post-takeover.
Circle successfully sold its Bath hospital in June 2021 but was unable to find a buyer for the Circle Birmingham site, which was originally a condition of the CMA approving the merger.
Following that attempt the CMA said it would also accept the sale of BMI Priory hospital to allay competition concerns, but this prompted a critical response from Circle calling the decision “flawed”.
Following that according to the regulator, “Circle launched another sales process on more favourable terms, still yielding no bids for Circle Birmingham”.
As a result, and after taking further feedback, the CMA has agreed that selling the BMI Edgbaston hospital would suffice and has withdrawn the requirement to sell either Circle Birmingham or BMI Priory.
‘Change in circumstances’
“The CMA has now provisionally found that there has been a change of circumstances as a result of which Circle’s undertaking to divest the Birmingham site is no longer appropriate to deal with the relevant competition concerns the CMA identified,” it said.
“Having considered the responses to the consultation conducted in 2021 and further evidence provided by relevant parties, the CMA has provisionally found that divestment of the Edgbaston site would instead resolve those competition concerns in a clear-cut manner.”
As part of the CMA’s assessment it scrutinised PPGs business plans for the Edgbaston hospital, financial forecasts for the site and the current operating performance of its healthcare division in the UK.
“The CMA’s view is that a divestment of BMI Edgbaston will remove the prolonged uncertainty that has affected the private healthcare sector in Birmingham since the merger took place and establish a viable independent competitor immediately,” the CMA added.
The consultation on the revised terms is open until 16 April.
In January Circle Health Group itself was purchased by UAE-based PureHealth in a deal which valued the organisation at around $1.2bn.
Health & Protection understands Circle Health Group will not be commenting while the consultation is ongoing.
Practice Plus Group has 10 hospitals and clinics across England and in February it was added to Bupa’s network of partner facilities.
Health & Protection has contacted Practice Plus Group for comment on the deal.