The competition regulator, the Australian Competition and...

The competition regulator, the Australian Competition and Consumer Commission (ACCC), will not oppose the merger of hospitals operator, Healthscope Ltd, and pathology, medical centres and pharmacy services group, Symbion Health Ltd.

The ACCC said it had granted its approval after accepting an undertaking from Healthscope to divest a number of pathology businesses in the north-eastern and Gippsland regions of Victoria.

"The proposed acquisition, after taking account of the undertaking, is unlikely to substantially lessen competition under section 50 of the Trade Practices Act," ACCC chairman Graeme Samuel said.

He said there were some competition concerns in parts of Victoria where the merged entity would be the only or dominant pathology provider.

But Healthscope had also said it would divest pathology assets in Albury, New South Wales.

"Healthscope has undertaken to divest the Gippsland pathology business, Benalla pathology business and Albury pathology business that are operated by Symbion and the Wangaratta pathology business operated by Healthscope, as part of the proposed acquisition," Mr Samuel said.

Healthscope must sell the businesses to a purchaser approved by the ACCC.

Healthscope said the total annual revenues of the regional businesses to be divested was about $34 million and did not trigger a termination right under a scheme of implementation deed relating to the merger.

Symbion Health shareholders are scheduled to vote on the proposed merger with Healthscope on September 11.

The Symbion board has endorsed the Healthscope proposal.

Healthscope managing director Bruce Dixon said he was pleased with the ACCC's approval.

"The proposal remains on track, and now we can move forward to the meeting," Mr Dixon said.

Healthscope's proposal involves paying $2.86 billion in cash and scrip for Symbion, and then offloading Symbion's consumer and pharmacy services divisions to private equity firms Ironbridge Capital and Archer Capital (IAC consortium) for $1.085 billion.

Healthscope would retain Symbion's pathology, imaging and medical centres divisions.

However, the Healthscope-Symbion merger has been overshadowed in recent weeks by the re-emergence of interest in Symbion from medical centres operator and pathology provider, Primary Health Care Ltd.

Primary has been steadily increasing its stake in Symbion, and earlier this week, held 17.78 per cent of Symbion's shares.

Primary has so far refused to disclose its motive for building the stake in Symbion.



AAP