Acquisition of Innovative Diagnostic Private Limited and Quest Laboratories Pte Ltd by Pathology Asia Holdings Pte. Ltd.


CCCS 400/007/18

Notifying Party:

Pathology Asia Holdings Pte. Ltd.

Notifying Date:

7 September 2018

Summary of transaction:

(i) the names of the merger parties;

Pathology Asia Holdings Pte. Ltd. (“PAH”), Innovative Diagnostics Private Limited (“Innovative”) and Quest Laboratories Pte Ltd (“Quest”) (collectively, the “Parties”).

(ii) a description of the transaction;

The acquisition of 100% of the issued share capital of Innovative, which follows on from an earlier transaction involving 100% of the issued share capital of Quest by PAH through its subsidiaries; and the intended integration of the businesses of Innovative and Quest (“Transaction”).

(iii) a description of the business activities of the merger parties worldwide and in Singapore;


PAH was established in 2018 and does not currently directly conduct any business activities in Singapore or worldwide. PAH is part of TPG, a leading global private investment firm founded in 1992, which has offices in San Francisco, Fort Worth, Austin, Dallas, Houston, New York, Beijing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, São Paulo, Singapore and Seoul. TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalisations, spinouts, growth investments, joint ventures and restructurings. TPG has been present in Asia since 1994, and is currently investing out of its seventh Asia-focused fund.


Innovative is a Singapore-based private laboratory which offers a comprehensive range of medical laboratory pathology services in Singapore. Innovative currently serves over 1000 customers, including general practitioners (“GPs”), clinics, medical centres, hospitals, dialysis centres, not-for-profit organisations and third-party payers.


Quest was established in Singapore in 1995 and has positioned itself as a premier laboratory and a preferred partner to clinicians through the delivery of personalised, high quality, and efficient laboratory services. Quest serves GPs, clinics, medical centres, hospitals, dialysis centres, not-for-profit organisations and third-party payers. Quest was previously a subsidiary of Healthscope Limited, one of Australia’s largest providers of integrated healthcare, operating over 4,800 inpatient beds and 45 hospitals across Australia.

(iv) a description of the overlapping goods or services, including brand names;

Innovative overlaps with Quest in the provision of in-vitro diagnostics (“IVD”) tests in Singapore, which are tests done on samples such as blood or tissue that have been taken from the human body. IVD tests can detect diseases or other conditions, and can be used to monitor a person’s overall health to help cure, treat, or prevent diseases. IVD tests may also be used in precision medicine to identify patients who are likely to benefit from specific treatments or therapies. Such IVD tests can include next generation sequencing tests, which involve scanning a person’s DNA to detect genomic variations.

PAH does not overlap with Innovative or Quest in the services that they provide in Singapore.

(v) a description of substitute goods or services;

The Parties submit that there are some close substitutes across the entire spectrum of IVD tests provided by the traditional medical diagnostic laboratory from a demand-side perspective. Some substitutes include POCT/NPT, imaging modalities for inter alia reviewing fatty liver, ECG (non-IVD test) vs Troponin (IVD test) for heart attack, Beta-HCG (IVD test) vs Ultrasound (non-IVD test) to confirm pregnancy, NIPT (IVD test) vs Ultrasound (non-IVD test) to detect Trisomy 21, BNP/NT-pro BNP (IVD test) vs Echocardiogram (non-IVD test) for heart failure and NPC Gold (IVD test) vs nasal endoscopy (non-IVD test) for Nasopharyngeal cancer screening.

(vi) the applicant’s views on:

a. definition of the relevant market(s);

The Parties are of the view that the relevant market should be defined as the market for clinical laboratory services in Singapore (“Laboratories Market”), or, at its narrowest, further segmented into:

(a) the market for clinical laboratory services provided by private laboratories in Singapore (“Private Laboratories Market”); and

(b) the market for clinical laboratory services provided by public laboratories in Singapore.

b. the way in which competition functions in this market;

The Parties submit that the Laboratories Market/Private Laboratories Market is a highly competitive market with many players who offer similar ranges of IVD tests to customers. Laboratories operating in the market compete on price and quality of services provided (i.e. turnaround times, accuracy and reliability etc).

c. barriers to entry and countervailing buyer power; and

Barriers to entry

The Parties submit that there are low barriers to entry to the Laboratories Market/Private Laboratories Market. The key factor which affects entry into the Laboratories Market/Private Laboratories Market is regulatory requirements. These regulatory requirements are clearly stated on the website of the Ministry of Health (“MOH”) and it is not difficult for new laboratories to meet such requirements, as seen from recent examples of entry into the Laboratories Market/ Private Laboratories Market.

Countervailing buyer power

The Parties submit that there is significant countervailing buyer power especially from larger customers such as hospitals and medical centres (which are able to self-supply IVD tests) as well as third-party payors (who purchase a large volume of IVD tests and hence have strong bargaining power to negotiate favourable terms and conditions when purchasing such services). Further, there are very low switching costs involved when they decide to switch from purchasing IVD tests from one laboratory to another laboratory. There are also generally no exclusive contracts between customers and laboratories which prevents them from switching their purchase to other laboratories, which means that switching can take place almost immediately i.e., as soon as for the next order. The ease of switching also contributes to the countervailing buyer power of customers.

d. The competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant);

Non-coordinated effects       

The Parties submit that while Innovative and Quest overlap in the services that they provide, customers would not view the IVD tests provided by Innovative as the next best alternative to Quest or vice versa. There are no specific or exclusive and non-substitutable tests which the Innovative and/or Quest provide to the market that their competitors, or very few of their competitors, do not provide.

In fact, every IVD test that they provide can be offered by public hospitals, as well as by some private hospitals and other laboratories. There are also smaller private laboratories that are alternatives for specific categories of tests. In addition, foreign laboratories could also enter and compete in the Singapore market. In short, there are numerous laboratories already in existence who possess similar levels of capabilities as Innovative and Quest in terms of IVD tests.

Due to the strong competition from existing competitors who can provide a similar range of IVD tests, the Parties submit that the Transaction would not give rise to any non-coordinated effects.

Coordinated Effects

The Parties submit that the characteristics of the Laboratories Market/Private Laboratories Market, is highly fragmented with many different players, difficult to monitor prices as most laboratories do not publish their prices publicly, and many different types of IVD tests available, are such that it would be very hard for the parties to coordinate their behaviour with competitors after the Transaction.

Further, the Laboratories Market/Private Laboratories Market are not markets in which laboratories can simply agree to raise prices and profit from such increased prices, because they are effectively constrained by the prices charged by public hospitals for the same IVD tests. If, following the Transaction, the merged entity coordinates with other private laboratories to raise prices, customers can simply switch their purchase of IVD tests to public hospitals. Given that the provision of IVD tests is a scale dependent business, raising prices will in fact cause the merged entity and other laboratories to suffer losses due to the loss of customers to public hospitals.

It is also not difficult for new players to enter the market given that entry barriers are low, and which in turn will act as an effective competitive constraint as well.


CCCS has conditionally approved the Transaction after accepting commitments from PAH.

The Final Commitments, attached in Annex 1, are effective from 18 October 2019.

Read the grounds of decision.

Decision Date:

21 October 2019

Read the media release.