1. What is a hospital merger?

A hospital merger may take several forms:

• merger of two hospital companies;
• amalgamation;
• acquisition of one hospital chain by another;
• acquisition of shares or voting rights;
• acquisition of control;
• acquisition of hospital assets;
• acquisition by a private-equity investor;
• formation of a joint venture between hospital groups.

Under Section 5 of the Competition Act, an acquisition, merger or amalgamation crossing the prescribed thresholds can constitute a “combination.”

Therefore, the first legal question is:

Does the proposed hospital transaction constitute a “combination” requiring notification to CCI?

If yes, the second question is:

Is the transaction likely to cause an AAEC in the relevant healthcare market?

2. Section 6 — prohibition of anti-competitive combinations

Section 6(1) provides the basic rule:

No person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India.

Such a combination is liable to be prohibited/treated as void under the statutory framework.

Thus, CCI does not prohibit hospital mergers simply because they create a large hospital group.

The test is whether the merger is likely to substantially harm competition.

3. Notification to CCI

Where a transaction qualifies as a combination, Section 6 requires notification to CCI before consummation, subject to applicable exemptions.

CCI itself describes the combination regime as applying to mergers, amalgamations and acquisitions meeting the Section 5 requirements.

Example

Suppose:

Hospital A + Hospital B = Hospital AB

If the transaction satisfies the applicable Section 5 criteria, the parties must examine CCI notification requirements.

The parties cannot simply complete the merger first and seek competition approval afterwards.

4. Standstill obligation

One of the most important issues is the standstill obligation.

The parties generally cannot implement the combination, or part of it, before CCI approval or the expiry of the statutory period, whichever is applicable.

The purpose is to ensure that the merging hospitals continue to compete independently while CCI examines the transaction. CCI describes the regime as mandatory and suspensory.

Why is this particularly important for hospitals?

Suppose Hospital A is acquiring Hospital B.

Before approval, the parties should not behave as though they are already one hospital chain by:

• jointly fixing prices;
• allocating patients;
• coordinating bids;
• exchanging competitively sensitive information;
• deciding which hospital will treat particular patients;
• coordinating discounts;
• jointly negotiating where this eliminates independent competitive decision-making.

The parties must continue competing independently until the transaction can lawfully be implemented.

5. Relevant market in hospital mergers

This is perhaps the most important substantive issue.

CCI does not necessarily consider the entire Indian healthcare industry as one market.

It examines:

A. Relevant product/service market

and

B. Relevant geographic market.

Under Sections 19(5)–19(7), CCI considers factors such as substitutability, consumer preferences, transportation costs and the nature of the services.

6. Relevant product market — hospital services

Healthcare is not a homogeneous product.

CCI has recognised a broad “hospital market”, which may be divided into:

• primary care;
• secondary care;
• tertiary care;
• quaternary care;
• specialised procedures.

CCI has expressly considered these different levels when examining healthcare combinations.

Example

A merger between two general hospitals may create an overlap in:

Broad hospital services

But a merger might also create narrower overlaps in:

• cardiology;
• oncology;
• nephrology;
• organ transplantation;
• maternity services;
• orthopaedics;
• neurosurgery;
• paediatric care.

Therefore, CCI may examine both the broad market and narrower specialised segments.

7. Relevant geographic market

Hospital competition is frequently local or regional rather than purely national.

A patient in Jaipur, Mumbai or Bengaluru generally does not treat every hospital in India as an equally effective substitute.

Factors include:

• distance;
• travel time;
• availability of specialists;
• emergency requirements;
• reputation;
• hospital infrastructure;
• patient preferences;
• availability of specialised equipment.

Therefore, a hospital merger may be harmless at the pan-India level but potentially problematic in a particular city.

Example

Suppose:

Hospital A and Hospital B each have 35% of the relevant hospital market in City X.

Their national market shares may be small.

But their combined share in City X could be 70%.

CCI would therefore have to investigate the local competitive effects.

8. Horizontal overlap

A horizontal merger occurs where the two hospitals operate at the same level of the supply chain and compete for the same patients.

This is the most obvious competition concern.

Example

Apollo Hospital A + another competing tertiary-care hospital in the same city.

Potential concerns include:

• higher hospital charges;
• reduced discounts;
• fewer choices for patients;
• reduced quality competition;
• reduced incentive to innovate;
• reduced bargaining alternatives for insurers;
• increased bargaining power over patients and third-party payers.

9. Market concentration

CCI examines the degree of concentration after the merger.

Relevant questions include:

• What are the parties' market shares?
• What is their combined market share?
• How much does the merger increase concentration?
• How many competitors remain?
• Are remaining competitors strong?
• Can new hospitals enter easily?

However, market share is not the sole determinant.

CCI considers a range of factors under Section 20(4), including:

• market shares;
• barriers to entry;
• imports/competitive alternatives where relevant;
• countervailing buyer power;
• likelihood of price increases;
• availability of substitutes;
• effective competition;
• removal of a vigorous competitor. 

10. Barriers to entry in healthcare

This is particularly important in hospital mergers.

Entry into hospital services can be difficult because of:

• enormous capital requirements;
• land costs;
• regulatory approvals;
• specialised medical equipment;
• shortage of skilled doctors;
• requirement for specialised nursing staff;
• reputation and brand development;
• accreditation;
• time required to establish a hospital;
• access to insurance networks;
• patient loyalty.

Therefore, even if a merged entity raises prices, a new competitor may not be able to enter the market quickly.

This can strengthen CCI's concerns about an AAEC.

11. Countervailing power of insurance companies

Healthcare markets have an unusual feature: the patient is often not the only economically important buyer.

Large insurance companies and third-party administrators may have significant bargaining power.

CCI may therefore ask:

Can insurers negotiate effectively with the merged hospital?

If a hospital merger creates a dominant provider in a city, insurers may have fewer alternatives.

This could ultimately affect:

• negotiated hospital tariffs;
• reimbursement rates;
• package prices;
• insurance premiums;
• patient costs.

12. Vertical competition issues

A hospital may not operate only hospitals.

A healthcare group can also have interests in:

• pharmacies;
• diagnostic laboratories;
• medical-device distribution;
• healthcare technology;
• insurance-related services;
• ambulance services;
• telemedicine.

Consequently, a merger may create vertical or complementary overlaps.

For example:

Hospital group + pharmaceutical distributor

could potentially give the hospital group the ability to disadvantage rival hospitals by restricting access to medicines or medical supplies.

CCI therefore examines vertical relationships as part of the AAEC analysis.

13. The problem of foreclosure

A hospital merger may produce:

Input foreclosure

The merged entity could restrict competitors' access to important inputs.

Customer foreclosure

The merged entity could divert customers/patients away from competing healthcare providers.

Data or platform foreclosure

If the transaction involves a healthcare platform, the combined entity may gain access to valuable patient or provider information and potentially use it to disadvantage competitors.

These concerns become particularly important when hospital businesses are integrated with pharmaceutical, diagnostic or digital-health businesses.

14. Coordinated effects

Sometimes the concern is not that the merged hospital itself becomes dominant.

The concern may be that the transaction makes it easier for remaining hospitals to coordinate their behaviour.

For example, if a city originally has:

A — 30%

B — 25%

C — 20%

D — 15%

E — 10%

and A+B merge, the number of major competitors decreases.

The surviving hospitals may find it easier to coordinate prices or other competitive parameters.

CCI therefore considers the possibility of coordinated effects.

15. Northern TK Venture / Fortis Healthcare case

This is one of the most important hospital-sector combination cases.

Case

Northern TK Venture Pte. Ltd. / Fortis Healthcare Ltd.

Combination Registration No. C-2018/09/601, decided by CCI on 29 October 2018.

Northern TK Venture proposed to acquire an interest in Fortis Healthcare.

The transaction involved parties with significant interests in the healthcare sector.

CCI examined overlapping healthcare activities and the competitive landscape.

Importantly, CCI noted that the acquirer/group, Apollo and Fortis had overlapping activities in healthcare and in several cities.

There was therefore concern about the possibility of the transaction facilitating coordinated behaviour.

The parties offered voluntary commitments, and CCI approved the combination subject to those commitments.

Principle

The case demonstrates that:

Even where CCI does not prohibit a hospital-sector transaction, it may impose/accept modifications or commitments to eliminate competition concerns.

16. Growth V / AINU — healthcare combination

Another useful example is C-2024/01/1102.

CCI considered the Broad Hospital Market and primary, secondary and tertiary care segments in overlapping cities, while also examining quaternary care at the pan-India level.

CCI ultimately left the exact market definition open because the transaction was not likely to cause AAEC.

The combined market share was in the 0–5% range, with insignificant increment, and there were several significant competitors including Apollo, Max Healthcare, Manipal, Fortis and Narayana.

Principle

The case demonstrates:

Market definition can be left open when the transaction is clearly non-problematic under every plausible market definition.

This is an important practical approach in CCI merger analysis.

17. Manipal Hospitals / Sahyadri Hospitals — 2025

A very relevant recent example is:

Manipal Hospitals Private Limited / Sahyadri Hospitals Private Limited

CCI approved Manipal's acquisition of up to 100% shareholding in Sahyadri Hospitals in September 2025.

The transaction illustrates how CCI examines hospital-chain consolidation through the combination framework.

The important lesson is that acquisition of an entire hospital chain is not automatically anti-competitive.

CCI asks:

1. What markets overlap?
2. What are the parties' shares?
3. How much does the transaction increase concentration?
4. What competitors remain?
5. Are there barriers to entry?
6. Will patients have sufficient alternatives?

18. HealthCare Global Enterprises / KKR — 2025

CCI also approved a combination involving acquisition in HealthCare Global Enterprises Limited (HCG) by KKR through Hector Asia Holdings and KIA EBT II Scheme in May 2025.

This illustrates another important point:

Private-equity investment in a hospital group can itself fall within the combination regime.

The competition analysis therefore looks beyond traditional “Hospital A merges with Hospital B” transactions.

Acquisition of control or relevant interests by an investment fund can also require competition-law analysis.

19. Baby Memorial Hospital / Bentley Asia — 2026

A very recent healthcare-sector example is the CCI approval announced on 18 March 2026 involving:

• acquisition of additional shareholding in Baby Memorial Hospital Limited by Bentley Asia Holdings II Pte. Ltd.; and
• subsequent acquisition by Baby Memorial Hospital of certain shareholding in Unimed Health Care Private Limited. 

This demonstrates the continuing application of merger-control law to multi-step healthcare transactions.

20. Multi-step hospital transactions

Hospital acquisitions frequently involve several steps:

1. acquisition of shares;
2. acquisition of control;
3. merger of subsidiaries;
4. transfer of hospital assets;
5. acquisition of another healthcare company.

The parties cannot necessarily avoid CCI scrutiny by artificially dividing the transaction into smaller steps.

CCI's jurisprudence recognises that interconnected transactions forming part of the same ultimate commercial arrangement can constitute a single combination.

The Supreme Court's decision in CCI v. Thomas Cook (India) Ltd. is an important authority on interconnected transactions. CCI itself cites the judgment for the proposition that interconnected transactions may constitute a single combination rather than being examined in isolation.

21. Gun-jumping

A major procedural risk is gun-jumping.

Gun-jumping occurs when parties implement a notifiable combination before obtaining the required approval or otherwise breach the standstill obligation.

In hospital mergers this could happen if, before approval, the parties:

• integrate management;
• coordinate prices;
• combine procurement;
• transfer sensitive patient/customer information;
• jointly determine commercial strategy;
• allocate doctors or services;
• coordinate negotiations with insurers.

The legal principle is simple:

Until lawful consummation, competitors must continue behaving as independent competitors.

CCI specifically explains that the purpose of the standstill requirement is to preserve the parties' independence until the transaction has been reviewed.

22. Green Channel

Not every combination requires a lengthy substantive review.

The Green Channel provides an automatic approval route for qualifying transactions where there are no horizontal, vertical or complementary overlaps of concern.

CCI states that, where the Green Channel requirements are satisfied, approval is deemed upon filing and acknowledgement.

Hospital example

Suppose:

Hospital A

is acquired by an investment fund that has:

• no hospital business;
• no diagnostic business;
• no pharmaceutical business;
• no healthcare vertical overlap.

Depending on the precise facts and applicable regulations, the transaction may potentially qualify for the Green Channel.

But a hospital-to-hospital merger with substantial overlapping operations would generally require much closer analysis and may not qualify.

23. Remedies available to CCI

CCI has several options.

A. Approval

If no AAEC is found, CCI approves the combination.

B. Approval with modifications

If competition concerns can be remedied, CCI can approve the transaction subject to modifications.

This is particularly relevant to healthcare transactions.

C. Prohibition

If competition concerns cannot be adequately remedied, CCI can prohibit the combination.

The statutory framework permits CCI to order that a problematic combination not be given effect or to impose an appropriate scheme where the AAEC cannot otherwise be eliminated.

24. Possible remedies in a hospital merger

In an especially problematic hospital merger, possible remedies could theoretically include:

Structural remedies

• divestiture of a hospital;
• divestiture of particular facilities;
• sale of certain assets.

Behavioural remedies

• restrictions on discriminatory pricing;
• non-exclusive arrangements;
• safeguards against foreclosure;
• information-access restrictions;
• commitments concerning treatment of competing healthcare providers.

Coordination safeguards

Parties may give commitments preventing the merged group or investors from using the transaction to facilitate coordinated behaviour.

The Northern TK Venture/Fortis case is particularly useful for demonstrating the use of voluntary commitments in the healthcare sector.

25. Quality of healthcare as a competition concern

Competition law is not concerned only with monetary prices.

Hospital competition can occur through:

• quality of doctors;
• waiting times;
• medical technology;
• patient experience;
• availability of specialists;
• infection-control standards;
• emergency services;
• treatment outcomes;
• innovation.

Therefore, a hospital merger that does not immediately increase prices could nevertheless raise concerns if it substantially reduces quality competition.

This is particularly significant because patients may have limited ability to assess quality before receiving treatment.

26. Impact on doctors

Hospital consolidation may also affect doctors and other healthcare professionals.

A merger can reduce the number of hospitals competing for:

• specialist doctors;
• surgeons;
• nurses;
• technicians.

This can potentially create a labour-market competition issue.

For example, if two dominant hospitals in a city merge, the merged entity may become a very significant employer of specialist doctors.

That could potentially affect:

• doctors' bargaining power;
• remuneration;
• mobility;
• contractual restrictions;
• recruitment.

Thus, modern merger analysis can potentially involve both product-market effects and labour-market effects.

27. Impact on patients

The ultimate practical concern is patient welfare.

A hospital merger can potentially result in:

Negative effects

• higher prices;
• fewer hospital choices;
• reduced discounts;
• reduced quality;
• reduced innovation;
• longer waiting times;
• reduced availability of particular services.

Potential benefits

But consolidation can also produce legitimate efficiencies:

• better infrastructure;
• economies of scale;
• better utilisation of expensive equipment;
• improved specialist networks;
• improved emergency-care capacity;
• greater investment;
• integrated healthcare delivery;
• reduced duplication.

CCI therefore has to balance competitive harm against the overall economic effects of the transaction.

28. Efficiencies

Hospital mergers may generate genuine efficiencies.

For example:

Hospital A has an underutilised MRI facility while Hospital B has specialist radiologists.

After merger:

equipment + specialists + patients = better utilisation

Similarly, a larger group might be able to:

• purchase equipment more efficiently;
• create integrated specialist teams;
• establish better referral networks;
• invest in expensive medical technology;
• improve training.

Such efficiencies are relevant to competition assessment, although they cannot simply be asserted; the parties need to substantiate them.

29. Difference between dominance and merger control

A common examination mistake is to confuse:

Section 4

Abuse of dominant position

with

Sections 5–6

Regulation of combinations.

A hospital chain does not violate competition law merely because it is large or dominant.

The problem arises if:

• it abuses its dominant position; or
• a merger/acquisition creates or strengthens a situation producing an AAEC.

Thus:

Dominance itself is not prohibited; abuse of dominance is prohibited.

30. Possible Section 3 issues during a merger

Section 3 may also become relevant where hospitals engage in anti-competitive agreements.

Examples could include agreements between hospitals to:

• fix treatment prices;
• divide geographic territories;
• allocate patients;
• coordinate bids;
• fix procurement terms.

A merger does not provide immunity for anti-competitive conduct.

31. Competition issues involving hospital procurement

Hospital groups purchase huge quantities of:

• medicines;
• medical devices;
• surgical equipment;
• implants;
• diagnostic equipment.

A merger may substantially increase the buyer's bargaining power.

This can produce efficiencies, but it could also affect suppliers and potentially competing hospitals if the merged group obtains preferential access to scarce inputs.

Therefore, procurement effects should be included in merger due diligence.

32. Competition issues involving diagnostic laboratories

Suppose:

Hospital A owns Diagnostic Lab A

and

Hospital B owns Diagnostic Lab B.

Their merger can create both:

• horizontal overlap in hospital services; and
• horizontal/vertical overlap in diagnostics.

CCI may examine whether the merged entity can:

• favour its own laboratory;
• deny referrals to independent laboratories;
• offer bundled prices;
• foreclose competing diagnostic providers.

33. Competition issues involving pharmacies

Similarly, a hospital group with its own pharmacy network may have incentives to channel patients toward its own pharmacy.

If a merger significantly strengthens that position, CCI may investigate possible foreclosure effects.

The same reasoning can apply to:

• medical devices;
• home healthcare;
• ambulance services;
• telemedicine;
• digital health platforms.

34. Confidential information during hospital merger

This is an important practical compliance issue.

Before approval, the two competing hospital groups should be careful about exchanging:

• current prices;
• future pricing plans;
• discounts;
• patient volumes;
• insurer negotiations;
• doctor remuneration;
• procurement strategy;
• future capacity plans;
• marketing strategies.

The existence of a merger agreement does not automatically mean that competitors may freely share commercially sensitive information.

35. Competition law due diligence checklist

For a hospital merger, the parties should examine:

Market

• What is the relevant geographic market?
• What hospital services overlap?
• Are there specialist overlaps?
• What are the parties' market shares?

Competitors

• How many effective competitors remain?
• Are there nearby alternatives?
• Can new hospitals enter?

Patients

• Will prices increase?
• Will quality decline?
• Will patient choice decrease?

Insurers

• Will the merged entity obtain excessive bargaining power?
• Can insurers switch hospitals?

Doctors

• Will the transaction substantially affect doctors' bargaining power?

Suppliers

• Will the merged entity foreclose medical-device or pharmaceutical suppliers?

Compliance

• Is CCI notification required?
• Does any exemption apply?
• Is Green Channel available?
• Has the transaction been structured as interconnected steps?
• Are there gun-jumping risks?

36. Important case-law principles

37. Exam-oriented legal framework

For a problem question, use this sequence:

Step 1 — Identify the transaction

Is it:

merger + amalgamation + acquisition + control + share acquisition?

↓

Step 2 — Determine whether it is a combination

Apply Section 5 and applicable exemptions.

↓

Step 3 — Determine whether notification is required

Apply Section 6 and the Combination Regulations.

↓

Step 4 — Define the relevant market

Ask:

Relevant product market + relevant geographic market

↓

Step 5 — Identify overlaps

• horizontal;
• vertical;
• complementary.

↓

Step 6 — Analyse AAEC

Apply Section 20(4):

• market share;
• concentration;
• barriers to entry;
• countervailing power;
• substitutes;
• likelihood of price increase;
• effective competition;
• removal of vigorous competitors.

CCI expressly identifies these factors in its merger-control guidance.

↓

Step 7 — Consider efficiencies

Determine whether the merger produces genuine efficiencies.

↓

Step 8 — Consider remedies

Can competition concerns be eliminated by:

• divestiture;
• behavioural commitments;
• other modifications?

↓

Step 9 — Final decision

CCI may:

approve → approve with modifications → prohibit

38. Conclusion

Hospital mergers occupy a particularly sensitive position under Indian competition law because healthcare is an essential service and patients often have limited ability to switch providers.

The central legal test is not:

“Is the hospital merger large?”

It is:

“Is the merger likely to cause an appreciable adverse effect on competition in the relevant healthcare market?”

The most important competition-law issues are therefore:

1. whether the transaction is a notifiable combination;
2. relevant product and geographic market;
3. horizontal hospital overlaps;
4. market concentration and market shares;
5. barriers to entry;
6. countervailing power of insurers/patients;
7. vertical foreclosure involving pharmacies, diagnostics, devices or pharmaceuticals;
8. coordinated effects;
9. quality and innovation effects;
10. effects on doctors and suppliers;
11. standstill/gun-jumping;
12. efficiencies; and
13. possible structural or behavioural remedies.

The Northern TK Venture/Fortis decision is especially valuable for demonstrating how CCI approaches healthcare-sector overlaps and coordinated-effects concerns, while Growth V/AINU and the Manipal/Sahyadri decision illustrate the more recent approach to defining hospital markets and evaluating concentration.

For a law examination, the key statutory provisions to cite are Sections 5, 6, 19, 20(4), 29 and 31 of the Competition Act, 2002, together with the Combination Regulations.