FCCA accepts acquisition of Animagi chain of veterinary service clinics

On 20 April 2015, the Finnish Competition and Consumer Authority (FCCA) approved an acquisition whereby EQT, a private equity investor, will gain control over the Animagi Oy chain of veterinary service clinics. EQT already owns Univet Oy, a veterinary service provider with 18 clinics across Finland. Animagi’s 37 clinics are mainly located in Southern Finland and the Helsinki Metropolitan Area; 32 of them are for small animals and the rest are equine clinics and hospitals. The chains’ operations overlap, particularly in the small animal veterinary market. The acquisition was transferred for further consideration at the FCCA on 13 February 2015. The acquisition was approved unconditionally, because the investigation demonstrated that the intervention threshold required by the Competition Act was not exceeded.

During the investigation of the business acquisition, some of Animagi’s and Univet’s competitors claimed that the acquisition would have harmful impacts on competition, particularly in the regions of Hämeenlinna, Jyväskylä, Kouvola, Lappeenranta and Oulu. In addition to these regions, the FCCA investigated the sector’s competitive situation in other areas where the parties’ operations overlap (the Helsinki Metropolitan Area, Turku and Tampere). This investigation demonstrated that other private and municipal small animal veterinary service providers are operating in all of these areas.

Although the merger will provide the new concentration with relatively high regional market shares, the investigation suggests that this is unlikely to give the merged company a level of market power which it could exploit to the detriment of customers. Furthermore, the FCCA estimates that concentration’s market power will be offset by the entry of potential new competitors into the sector and the potential of existing companies to expand their operations.

The establishment of veterinary clinic chains is a relatively new phenomenon in Finland; in addition to Animagi and Univet, there is another chain operating in the sector – Tuhatjalka, which has seven clinics. Veterinary services are offered in more than 200 clinics across Finland. Most of these are independent clinics run by 1–2 veterinarians.

Concentration in the highly fragmented veterinary market cannot, as such, be considered a harmful development for consumers. Concentration and the establishment of chains may also generate efficiency gains that benefit consumers in the form, say, of services of higher quality and variety.

The decision issued by the FCCA includes numerous business secrets of the parties involved. It cannot therefore be published until the confidential information has been removed. The public version of the decision will be posted on the FCCA’s website as soon as it has been finalised.