The CMA says “it is minded to accept” remedies offered by Welltower following its phase one investigation into a series of transactions involving more than 600 UK care homes operated by providers including Barchester Healthcare, HC-One, Aria Care and Danforth Care.

The regulator announced on 21 it has identified competition concerns in 30 local areas across England and Scotland. 

Welltower has proposed remedies, including the sale of certain care home properties and changes to operational arrangements in affected areas.

The investigation is likely to become a landmark case for how the CMA approaches complex healthcare transactions involving institutional investors, landlords and operators.

Matthew Woodford, Partner and Head of Competition at Browne Jocobson, said: “While the regulator has signalled that concerns may be capable of being resolved through targeted structural remedies, the investigation has raised questions for how consolidation in the care sector will be assessed going forward.

“What is particularly significant is the CMA’s focus on the relationship between ownership, operational influence and local competition with investors and landlords needing to think about how their commercial arrangements may affect resident choice, pricing and quality of care.”

Vicky Tomlinson, Partner and corporate health lead at Browne Jacobson, said: “The CMA’s proposed acceptance of remedies represents an important development in one of the most closely watched healthcare transactions in recent years. 

“For investors and providers, the message is that regulatory scrutiny in healthcare transactions is becoming more sophisticated, particularly in sectors delivering essential public-facing services.

“It will also be interesting to see how many homes ultimately come to market as part of the remedies process and whether this creates additional acquisition opportunities for regional operators and new entrants into the sector.

“We expect this case to shape how future transactions are structured and how due diligence is carried out and assessed across the independent health and social care market, especially where there are complex ownership models, operational partnerships or significant local market overlap.

“The CMA will now consult on the proposed remedies before making a final decision on whether to accept them and conclude the investigation without referring the matter to a phase two inquiry.”

Browne Jacobson’s corporate health team advises investors, operators and lenders on acquisitions and disposals, regulatory compliance and strategic due diligence across the independent health and care market. 

To discuss the implications of this decision or broader developments in the sector, please contact our independent health and care team.