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FTC: DaVita must divest 7 clinics as a condition of acquiring Renal Ventures

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The Federal Trade Commission is requiring DaVita Kidney Care to divest its ownership interest in seven dialysis clinics as a condition of acquiring Renal Ventures Management LLC. The divesture of the clinics, five in New Jersey and its suburbs and two in the Dallas area, would resolve charges that the acquisition is anticompetitive.

DaVita will divest the seven clinics to PDA-GMF Holdco LLC, a joint venture between Physicians Dialysis and GMF Capital LLC.

"We are excited to have Renal Ventures' patients, employees and physicians join the DaVita Village," a spokesperson for DaVita told NN&I in a written statement. "Both DaVita and Renal Ventures have dedicated caregivers with a relentless passion towards enhancing the quality of life for patients. We look forward to benefiting from the  power of the combined talent dedicated to delivering industry-leading outcomes and comprehensive care."

Under the proposed settlement, DaVita is barred from contracting with the medical directors of the seven clinics for three years, and it must provide transition services for up to 24 months. The proposed settlement also allows the FTC to appoint a monitor to ensure DaVita’s compliance.

According to a complaint brought by the Bureau of Competition, a division of the FTC, the acquisition would lead to significant anticompetitive events in the New Jersey and Dallas markets because DaVita and Renal Ventures clinics compete directly with each other.

The complaint also alleged that new entry of competing dialysis clinics in these seven markets is not likely, because the markets do not have sufficient available kidney specialists to support new competition.

Under the terms of the proposed settlement, DaVita must obtain agreements from the medical director of each divested clinic to continue providing physician services after it transfers ownership; obtain consent from the relevant landlords to transfer leases for the facilities to the buyer; and provide the buyer an opportunity to interview and hire employees from the divested clinics. -by Rebecca Zumoff