Press release

CMA requires sale of East Midlands adult mental health hospital

The merger of Cygnet Health Care Ltd and Cambian Adult Services will mean less choice in some East Midlands male mental health services.

Therapy session

Universal Health Services, Inc. – through its subsidiary Cygnet Health Care Limited (Cygnet) – acquired Cambian Adult Services in December 2016. Both companies run hospitals providing rehabilitation services to patients suffering from long-term mental illness.

An in-depth investigation by a group of independent Competition and Markets Authority (CMA) panel members has found that the merger may be expected to result in a substantial lessening of competition in the East Midlands where the companies would be the largest provider of male mental health rehabilitation services, being many times the size of the next largest provider in the region.

The CMA found that clinical commissioning groups (CCGs), the main customers of these hospitals, would have less choice, and may face higher prices or lower quality when referring patients. In order to maintain competition in the East Midlands, the companies are now required to sell one of their hospitals in the area to a buyer approved by the CMA.

The CMA has cleared the merger in all other regions originally identified, including the West Midlands where it had identified possible concerns about mental health services to female patients in its provisional decision published in August.

Simon Polito, Chair of the inquiry group, said:

Mental health hospitals are a vital part of our healthcare system, caring for some of the most vulnerable in our society. CCGs, who are under increasing budget pressure, should have access to a range of facilities and treatment options so they can ensure the best possible care.

We have found that this merger could affect the quality and price of mental health rehabilitation services for male patients in the East Midlands. The companies must now sell off one of their hospitals in this region.

Notes to editors

  1. Cygnet Health Care Limited operates 20 mental health hospitals in the UK.

  2. Cambian Adult Services operates 61 mental health hospitals in the UK.

  3. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.

  4. The final report can be found on the case page.

  5. On 22 February 2017, the CMA started its initial investigation and on 3 May 2017 the CMA referred it for a phase 2 investigation.

  6. All the CMA’s functions in phase 2 merger inquiries are performed by independent inquiry groups chosen from the CMA’s panel members, and supported by CMA staff. The appointed inquiry group are the decision-makers on phase 2 inquiries.

  7. The members of the inquiry group are: Simon Polito (Inquiry Chair), Thomas Hoehn, Jill May and Andrew Popham.

  8. The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and/or business; the membership of an inquiry group usually reflects a mix of expertise and experience.

  9. For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Flickr and LinkedIn and like our Facebook page. Sign up to our email alerts to receive updates on merger cases.

  10. Media enquiries should be directed to press@cma.gsi.gov.uk or 020 3738 6337

Published 16 October 2017