August 28, 2023

The £1.24billion merger between two firms providing services for the NHS has been provisionally cleared by the UK’s competition watchdog.

The Competition and Markets Authority (CMA) said the acquisition of AIM-listed Emis by US healthcare giant UnitedHealth Group is not expected to harm competition or adversely affect patients.

Emis, which is based in Leeds, provides software and IT services to GP surgeries across the UK, including the electronic patient record system used by the majority of NHS GPs.

Optum, which is part of UnitedHealth, supplies software used by GPs when prescribing medicines, as well as data analytics and All-in-one web analytics advisory services.

The CMA said that Optum’s acquisition of Emis, which provides the electronic patient record system used by the majority of NHS GPs, is not expected to harm competition 

Optum made an offer to buy Emis in June last year, but in January the CMA launched an initial investigation after it was concerned the deal could result in ‘worse outcomes’ for the NHS by reducing competition.

In March, the CMA referred the deal to an in-depth probe overseen by an independent panel after rejecting UnitedHealth’s proposed remedy of divesting some businesses.

Today, the CMA said that its investigation confirmed that Emis, as the lead supplier to NHS GPs across the UK, holds a ‘particularly strong’ market position in the supply of electronic patient record systems.

However, it also found that the combination between the two firms ‘should not present competition concerns’.

The regulator will now publicly consult on its provisional findings before reaching a final decision by the beginning of October, the two firms said. 

Kirstin Baker, chair of the independent inquiry panel carrying out the investigation, said: ‘Digital technology and data analytics play an increasingly important role in supporting high quality healthcare in the NHS and so it’s important we investigate this deal thoroughly.

‘We want to ensure the NHS continues to benefit from innovation and efficiencies brought about by technology services competing for its business. 

‘After carefully considering a broad range of evidence, we have provisionally found that this deal is not expected to harm competition or adversely affect patients.’

The announcement sent FTSE AIM UK 50-listed  jumping by a quarter to just over £19 in late trading on Friday, back to the record highs hit in June 2022 shortly after the takeover offer was announced.

Emis’ largest shareholder is Bank of America Corporation, with US giants Morgan Stanley and JP Morgan Securities also among the top ten investors.

Optum UK said they would continue to engage cooperatively with the CMA until its investigation concludes. 

The firm added: ‘We remain focused on supporting the long-term success of the NHS.

Our aim is to help make the UK health care system work better for GPs and patients alike.’

Emis’ shares have jumped above £19, towards the record highs seen in June last year when the takeover offer was announced

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