The FCCA proposes the Market Court to prohibit the merger between Mehiläinen and Pihlajalinna

On 29 September 2020, Finnish Competition and Consumer Authority (FCCA) has proposed the Market Court to prohibit the merger between Mehiläinen and Pihlajalinna. According to the FCCA’s investigation, the merger would significantly impede effective competition in the Finnish health services market. Post-merger only two nationwide healthcare companies would remain in the market.

The Finnish health services market is dominated by three large national players: the merging parties, Mehiläinen Yhtiöt Oy and Pihlajalinna Oyj as well as Terveystalo Oyj.

Pihlajalinna has become a significant competitor for Mehiläinen and Terveystalo. Pihlajalinna has traditionally been a strong player in services sold to municipalities, but the company has expanded in recent years, especially in occupational health services and medical services.

Mehiläinen and Pihlajalinna compete in almost every segment of the healthcare market and they sell services extensively to individuals, companies, insurance companies and public sector customers. The merger would likely lead to significant price increase in all these segments to the detriment of customers and taxpayers.

Finnish healthcare market would become even more concentrated post-merger

The Finnish healthcare market has concentrated rapidly over the last decade. The three largest players, Mehiläinen, Pihlajalinna and Terveystalo, have multiplied their combined market shares since 2014. This concentration is partly due to these companies acquiring a great deal of their smaller competitors.

If approved, the merger would seal this and irreversibly change the Finnish health services market. Post-merger, two companies – Mehiläinen and Terveystalo – would control a significant part of the healthcare market with their superior market position.

The merger would create competition concerns in the health services market

In its investigation the FCCA identified competition concerns in several healthcare segments. According to the FCCA’s investigation the merger would lead to competition concerns in the following areas:

  • Private medical services in a total of 16 local markets, including the major cities of the Helsinki metropolitan area, Turku, Tampere, Oulu and Kuopio.
  • Occupational health services in 21 locations, including Helsinki, Turku, Tampere and Kuopio. In occupational health services, competition problems were also identified in customers who procure occupational health services for offices located in several regions and require an extensive network of clinics from the service provider.
  • Private hospital services in the area of four hospital districts.
  • Services provided to insurance companies, based on the prices and other terms negotiated between insurance companies and the merging parties. These terms are applied when the insurance company pays the treatment on behalf of its customer.
  • Infertility treatment services in the Helsinki metropolitan area.
  • Public sector outsourcing in the following segments:
    • holistic outsourcing
    • primary health care outsourcing
    • outsourcing for occupational health services
    • staffing and on-call purchasing services.

Proposed remedies not sufficient to address the identified competition concerns

Competition concerns raised by a merger may often be addressed with remedies. During the FCCA´s investigation, Mehiläinen submitted two remedies proposals. The proposed remedies did not adequately address the identified competition concerns and would not have been sufficient to prevent higher prices and poorer choice for customers. Thus, the FCCA could not accept the remedies.

“Not all mergers can be cleared with remedies. Due to the scale and gravity of the competition concerns, the remedies were not a realistic option”, says Sanna Syrjälä, Director of Merger Control.

Prohibition decisions are rare 

Merger control began in Finland in 1998. This proposal for prohibition is the fifth that the FCCA has ever made. This is the largest merger investigation in the FCCA’s history.

According to the Competition Act, the Market Court shall issue its decision within three months. The Market Court can either prohibit the merger, approve the merger as such or impose remedies. A decision adopted by the Market Court may be appealed to the Supreme Administrative Court.

The FCCA’s proposal contains business secrets of the parties involved. The proposal cannot therefore be made public until after the business secrets have been removed.

Read more:

The time limit for processing the merger of Mehiläinen and Pihlajalinna has been extended until 29 September 2020, FCCA press release 21 August 2020

The time limit for processing the proposed merger of Mehiläinen and Pihlajalinna has been extended until 27 August 2020, FCCA press release 26 June 2020 (press release in Finnish)

FCCA opens in-depth investigation into the competition impacts of the proposed merger of Mehiläinen and Pihlajalinna FCCA press release 12 March 2020.


Director Sanna Syrjälä, tel. +358 29 505 3385
Senior Economist Matias Pietola, p. +358 29 505 3069

According to the Competition Act, a merger must be reported to the FCCA if the combined turnover of the parties to the concentration exceeds 350 million euros and the turnover of at least two of the parties resulting from Finland exceeds 20 million euros for both. The FCCA approves the merger provided that it will not result in any of the negative impacts mentioned in the Competition Act. The FCCA will intervene in the merger if its investigation indicates that the merger would significantly impede effective competition on the Finnish market or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position. If required, the processing of the merger notification is carried out in two phases. The first stage lasts a maximum of 23 workdays. If it is clear that the merger will not have any negative effects on competition or if the negative effects can be prevented through the conditions proposed by the parties involved, the merger is approved after this initial processing phase. If this is not the case, the FCCA makes the decision to submit the matter for further investigation in which the merger and its competition effects are comprehensively examined.

Read more about merger control.