Hospital merger assessment in South Africa

LHG first acquired a 25% stake in JMH in 1997, and increased this to 49.4% in 2003. The remaining 50.6% of equity in JMH was owned by doctors who work, or have worked, in JMH’s hospitals. In 2011, LHG increased its stake to 70%, making it the majority owner. Prior to this, the companies had been separate entities, with JMH having a separate board that did not report to LHG (although LHG had representation on JMH’s board to reflect its shareholding); they also had separate management structures and different IT systems. The South African Competition Commission (SACC) therefore treated the 2011 acquisition as a merger of the two firms.