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Richard Feinstein, Director of the Federal Trade Commission’s Bureau of Competition, issued the following statement today regarding the announcement by Capella Healthcare that it is abandoning its plans to acquire rival Mercy Hot Springs health system in Hot Springs, Arkansas.

“The fact that this acquisition will not proceed is a victory for local businesses and patients, as it will preserve access to low-cost, high-quality healthcare for the citizens of Hot Springs, Arkansas,” Feinstein said.

“Staff of the Bureau of Competition had been investigating the proposed transaction for months.  We had informed Capella Healthcare and Mercy Hot Springs that we had serious concerns about the likely anticompetitive harm that would have resulted if the transaction was completed, and that we were prepared to challenge the transaction,” Feinstein said.  “Staff gathered testimonial, documentary, and economic expert evidence that this transaction was anticompetitive and would likely have resulted in higher prices and diminished health care service in Hot Springs.”

Capella is a for-profit healthcare system headquartered in Franklin, Tennessee that operates 12 acute care hospitals in communities across six states.  Mercy Hot Springs is a not-for-profit Catholic health care system headquartered in St. Louis, Missouri that operates over 30 hospitals and 270 healthcare clinics across seven states.  

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action.  To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001.  To learn more about the Bureau of Competition, read Competition Counts.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.