The Philippine Competition Commission (PCC) approved the proposed acquisition by AIA Philippines Life and General Insurance Company Inc. (AIA Philippines) of MediCard Philippines Inc. (MediCard), hurdling a crucial government regulatory requirement needed to close the transaction.
In a decision released on Friday, the PCC said it found that the proposed takeover will not likely result in substantial lessening of competition in the markets for individual and group health or medical coverage.
It added that other health plan companies offering the same services remain to pose substantial competitive constraints on the merged firms after the transaction.
“There will be no significant shift in the share of the parties in the market and the number of players will remain unchanged posttransaction,” stated the decision cleared by PCC officer in charge chair Johannes Bernabe.
Others who cleared the decision are PCC commissioners Emerson Aquende, Marah Victoria Querol and Michael Peloton.
The PCC said that while Medicard is among the top health maintenance organizations (HMOs) in the Philippines at the time of the merger, holding 16.93 percent of the market share, it competes with Maxicare HealthCare Corp. which holds a bigger 36.29 percent.
Other players in the market include Asalus Inc. (Intellicare) with 26.12 percent share, PhilHealth Care Inc. with 4.89 percent, Value Care Health Systems Inc. with 4.20 percent.
Other HMOs comprise the remaining 11.57 percent market share.The competition commission said it expects that the current concentration of Medicard’s market shares will spread thinner when reviewed to compete with not only other HMOs but also insurance companies offering similar services and health plans.
There are currently 29 health maintenance organizations and 30 life insurance companies competing in the local market which provides individual and group health or medical coverage, according to the PCC.
AIA in September of last year said that it has acquired 100 percent of the shares in MediCard, thereby increasing their reach and strengthening their presence in the Philippines’ health insurance and health-care services.
AIA said that MediCard’s president and chief executive officer, Nicky Montoya, will continue to lead the HMO company following this announcement of the acquisition. INQ