The Australian Competition and Consumer Commission (ACCC) has cleared (10 December) Integral Diagnostics’ (ASX: IDX) proposed acquisition of Capitol Health (ASX: CAJ), following the acceptance of a court-enforceable undertaking.
As part of the agreement, Integral Diagnostics must divest Capitol Health’s radiology clinic in Melton, Victoria, to an approved purchaser. This condition addresses competition concerns in the Melton region, where the merger would have combined two of the three primary providers of general diagnostic imaging services.
“Without this divestment, the acquisition could have led to higher prices, reduced bulk-billing, or diminished service quality for patients in the local area,” said ACCC Commissioner Dr. Philip Williams. The ACCC’s investigation revealed that alternative providers or new market entrants were unlikely to exert effective competitive pressure in the region.
The proposed acquisition will see Integral Diagnostics acquire 60 radiology sites across Victoria, Western Australia, Tasmania, and South Australia. Integral Diagnostics and Capitol Health both operate clinics providing general diagnostic imaging services, including ultrasound, CT, and X-Ray scans, and in some cases, MRI and nuclear medicine services.
The ACCC concluded that competition concerns outside Melton, including in Busselton and Bunbury in Western Australia, were unlikely due to the presence of sufficient alternative providers.
“The divestiture will allow for a viable competitor to remain in the Melton region while enabling the broader merger to proceed without significantly lessening competition in other markets,” Dr. Williams added.
This decision underscores the ACCC’s commitment to preserving competitive healthcare markets while enabling industry consolidation where appropriate.
Further details, including the court-enforceable undertaking, are available on the ACCC’s public register.
Background on the Companies
Integral Diagnostics operates 70 diagnostic imaging sites across Australia and New Zealand, trading under Apex Radiology in Western Australia and Lake Imaging in Victoria. Capitol Health runs 61 clinics across South Australia, Tasmania, Victoria, and Western Australia, including brands such as Capital Radiology, Direct Radiology, and Imaging @ Olympic Park.
The Melton clinic slated for divestiture is located at Westcare Medical Centre, 211 Barries Road, Melton West, Victoria.
