The Bundeskartellamt has discontinued its divestment proceedings against the University Hospital of Tübingen and the Zollernalb District after the parties to the merger reversed the merger transaction.

The undertakings had put the hospital merger into effect in 2003/2004 without prior notification to the Bundeskartellamt. The Bundeskartellamt only gained knowledge of the merger at the end of 2007, upon which it initiated divestment proceedings.

In the Bundeskartellamt’s view the merger has strengthened existing dominant positions and should therefore be reversed. By reversing the merger on their own initiative the undertakings have avoided action by the Bundeskartellamt to enforce divestment measures.

Until 2003 the hospitals in Albstadt, Balingen and Hechlingen belonged to the Zollernalb administrative district. In late 2003 Zollernalb-Klinikum gGmbH was set up as an operating company. The University Hospital of Tübingen and the Zollernalb administrative district were equally represented in the company. The hotel management companies of the hospitals in Balingen, Hechingen und Albstadt were entrusted to Zollernalb Klinikum gGmbH in early 2004.

As in previous merger proceedings in the hospital sector, the Bundeskartellamt defined the product market as the acute hospital market. This comprises all general hospitals and specialised clinics. Rehabilitation and other nursing centres do not fall under this market definition. In geographic terms the Bundeskartellamt defined the market as representing the two regional markets around Tübingen (Tübingen post code area and greater Tübingen) and Zollernalb (consisting of the post code areas of Albstadt, Balingen and Hechingen). In the market investigations hospitals in a wider area around these locations were asked about their number of cases.

It became clear from the examination that the University Hospital of Tübingen and the Zollernalb hospitals, with market shares of significantly over 60 % in the relevant markets, already had a competitive scope of action before the merger which could not sufficiently be controlled by their competitors, significantly smaller surrounding hospitals. The merger resulted in an increase in market shares and the strengthening of the undertakings’ dominant position. An additional evaluation of the overall Zollernalb/Tübingen market came to the same conclusion.

President Dr Bernhard Heitzer stated: “All entrepreneurial activity, and this includes entrepreneurial activities of the public sector, is subject to the Act against Restraints of Competition (ARC). It is to be welcomed that the parties involved proved conciliatory before formal divestment proceedings had to be opened.”