European Commission - Press release
Mergers: Commission clears acquisition of iSOFT by CSC
Brussels, 21 June 2011 - The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Australian healthcare software supplier iSOFT by the US IT services provider Computer Sciences Corporation (CSC). After examining the operation, the Commission concluded that the integration of CSC and iSOFT would not significantly reduce competing IT service providers' access to healthcare software in particular in the UK, where the merging parties' market shares are the highest. iSOFT' competitors would also retain asufficient customer base.
The proposed transaction mainly gives rise to a vertical and conglomerate link between CSC and iSOFT since they operate at different levels in the IT industry. As a prime contractor for healthcare IT management services, CSC may source healthcare software such as that offered by iSOFT. Alternatively, CSC and iSOFT IT products and services are used complementarily by healthcare providers.
The Commission therefore examined the proposed transaction impact on access to healthcare software for competitors of CSC and on access to a sufficient customer base for competitors of iSOFT. The main effects of the proposed transaction are in the UK.
The investigation demonstrated that there are sufficient alternative healthcare softwares developed by competitors of iSOFT with which CSC competitors can partner.
In the UK market, the proposed transaction will not restrict competing healthcare software providers’ access to a sufficient customer base, due to the sophistication and buyer power of customers of CSC healthcare IT services which maintain a high degree of discretion as to their healthcare software provider. CSC further faces strong competitive constraints from alternative IT service providers such as British Telecom which may partner with alternative healthcare software providers.
The Commission therefore concluded that the proposed concentration would not significantly impede effective competition in the European Economic Area (EEA) 1 or any substantial part of it.
The transaction was notified to the Commission for regulatory clearance in the EEA on 12 May 2011.
Companies and products
Computer Sciences Corporation is a US provider of IT services to a large base of multinational companies, governments and agencies across a range of industries.
iSOFT Group Limited is an Australian provider of healthcare software, principally in Australia and EEA.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the European Economic Area (EEA)1 or any substantial part of it.
The vast majority of mergers does not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at:
The EU plus Norway, Iceland and Lichtenstein