Australia's competition regulator has killed the $1 billion takeover of Healius (HLS.AX) by rival Australian Clinical Labs (ACL.AX) in its fourth decision in the past year to block a big ticket merger.
The decision came ahead of ACL saying it would withdraw its offmarket takeover bid for pathology group Healius, citing a "significant" deterioration in the medical centre operator's performance since the offer was announced in March. Healius' board recommended its shareholders reject the ACL bid.
"Healius welcomes (the) announcements from the ACCC and ACL, ending an extended period of bid-induced market disruption and uncertainty for Healius," an ASX statement from the firm said on Friday.
Healius shares fell as much as 9.2% to A$1.380 and were set for their worst session since Nov. 22 if current losses hold. ACL shares fell about 2.4% to A$2.85.
The Australian Competition and Consumer Commission (ACCC) said in its decision a merger of the two companies would lead to a deterioration in competition in the domestic pathology services market.
"We consider that the proposed acquisition would be likely to result in a substantial lessening of competition as it would combine two of the three largest providers of pathology services in Australia, further consolidating already concentrated markets," ACCC Commissioner Stephen Ridgeway said.
The rejection is the fourth from the ACCC on a major deal in Australia in the past year.
The regulator has also ruled against a data-sharing agreement between telecoms giant Telstra (TLS.AX) and internet provider TPG Telecoms (TPG.AX), as well as ANZ's (ANZ.AX) buyout of Suncorp's (SUN.AX) banking business.
It also blocked Transurban's (TCL.AX) purchase of a Melbourne road, taking the value of quashed deals to A$9 billion.
ACL said it was worried about the 45% slide in Healius shares since the deal was announced on March 20, and that its board was concerned for the firm's financial performance. However, it said it would remain open to a merger of the two companies.
A Healius spokesman said the company noted the ACCC's clear decision.
($1 = 1.4932 Australian dollars)
