FTC orders DaVita to divest 7 clinics as part of Renal Ventures acquisition deal

Alyssa Rege - Print  | 

The Federal Trade Commission ordered Denver-based DaVita, a kidney dialysis chain, to divest five clinics in New Jersey and two clinics in Texas as part of a settlement resolving a complaint that the company's $358 million acquisition of Lakewood, Colo.-based Renal Ventures Management is anticompetitive.

Under the settlement, DaVita will divest its seven clinics to PDA-GMF Holdco, a joint venture between North Miami Beach, Fla.-based Physicians Dialysis and Zurich, Switzerland-based GMF Capital.

DaVita will also be required to obtain consent from the medical directors of each divested clinic to continue providing physician services after the ownership transfer and the relevant landlords to transfer the lease agreements for the divested facilities. DaVita must also allow the new owners to interview and hire employees at their own discretion.

The settlement also bars DaVita from contracting with the medical directors of the divested clinics for a period of three years and requires DaVita to provide transition services for up to 24 months following the transaction's closing. The FTC will also reserve the right to appoint a monitor to ensure the company's compliance with the terms outlined in the settlement.

According to the FTC's complaint, the acquisition would decrease competition in a number of New Jersey and Texas markets. FTC officials said DaVita and Renal Ventures are direct competitors in those markets and the acquisition would represent "either a merger to monopoly or a reduction of competitors from three to two." The commission alleged the acquisition would force consumers to pay higher prices for dialysis treatments.

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