The competition regulator has allowed pathology and radiology provider Sonic Healthcare to buy the Healthscope pathology business in WA but won't allow Sonic to acquire Healthscope's pathology operations in Queensland.
Healthscope announced in May that it would sell its pathology businesses in Queensland, NSW, the ACT and WA to Sonic, subject to regulatory approval from the Australian Competition and Consumer Commission, for $100 million.
In August, the ACCC produced a statement of issues in relation to Sonic's proposed acquisition.
In September, Sonic backed away from acquiring the NSW/ACT business due to the time elapsed since the transaction was announced.
Sonic said today that it had received approval from the ACCC to acquire the WA business, for which Sonic will pay $18 million.
The sale is expected to be completed later in October.
But the ACCC had advised that it would not approve the acquisition by Sonic of Healthscope's Queensland pathology business.
Sonic said it and Healthscope were considering the ACCC's decision in respect of the Queensland business.
The ACCC said on Thursday that the proposed acquisition of the Queensland business was likely to have the effect of substantially lessening competition in the market for the supply of community pathology services in Queensland.
"The proposed acquisition in Queensland would result in the removal of a substantial competitive constraint on the two major pathology providers in that state," ACCC chairman Rod Sims said in a statement.
"Whilst Sonic and Primary are the clear market leaders in Queensland, Healthscope is an important competitor in that market."
Shares in Sonic closed three cents higher at $13.87.