Commission Decision No. 06-M-003-2022: Proposed Acquisition by AIA Philippines Life and General Insurance Company of Shares in MediCard Philippines Inc.
Commission Decision No. 06-M-003-2022:
Proposed Acquisition by AIA Philippines Life and General Insurance Company
of Shares in MediCard Philippines Inc.
In the proposed transaction, AIA Philippines Life and General Insurance Company Inc. (AIA Philippines) will buy 100% of shares in MediCard Philippines Inc. (MediCard).
PCC found that the proposed takeover will not likely result in substantial lessening of competition in the markets for individual and group health or medical coverage. After the transaction, PCC noted that other health plan companies and insurance firms offering the same services remain to pose substantial competitive constraints on the merged firms.
The PCC Mergers and Acquisitions Office also found that customers are able to switch easily to other health or medical coverage firms, since majority of HMO plans run only for a year and policyholders are not barred from switching providers.
PCC also observed that customers looking for group health or medical coverage have high bargaining power and can negotiate with service providers for better terms. The high bargaining power of these customers pose sufficient competitive constraints as well for the merged firm.
AIA Group Limited and its subsidiaries comprise one of the largest independent publicly listed pan-Asian life insurance group present in 18 markets, including the Philippines, China, Hong Kong, Thailand, Singapore, Malaysia, Australia, Cambodia, Indonesia, Myanmar, New Zealand, South Korea, Sri Lanka, Taiwan (China), Vietnam, Brunei and Macau SAR, and a joint venture in India. In the Philippines, AIA Philippines is a life insurance company and was formerly known as Philippine American Life and General Insurance Company or AIA Philam Life.
On the other hand, Medicard is among the largest health maintenance organizations (HMO) in the Philippines with over 920,000 members and nationwide coverage in 523 hospitals and 641 clinics engaging the services of 23,000 doctors and 817 dentists.