Competitive assessment opens way to medical manager merger

Genesis assisted in the competitive assessment required for the merger filing between AfroCentric/DENIS.

AfroCentric is primarily involved in the administration of medical aid funds and managed healthcare activities. DENIS is a registered managed care organisation (or MCO) specialising in the provision of dental managed care services.

Genesis input into this filing included:

• An analysis of the relevant product and geographical market: Genesis used experience and case precedent of medical markets in the determination of the relevant broad and narrow markets.
• Assessment of potential horizontal and vertical effects of proposed merger: Using expert economic experience, Genesis conducted an assessment of the vertical and horizontal elements of the medical aid and MCO market.

This included analysis of (i) product differentiation and the fragmented nature of the market, (ii) barriers to entry and exit in the relevant market, (iii) the effects of countervailing buyer power and switching given that this is a tender market, (iv) an analysis of competition regulation in the relevant market, and (v) the determination of potential foreclosure effects within the relevant market.

Genesis’ input and drafting responses assisted the merging parties in using economic evidence to demonstrate that the proposed merger would not result in any anti-competitive effects. The merger has since been approved.