The Federal Trade Commission is appealing a decision by a federal judge to reject its challenge to Laboratory Corp. of America’s (NYSE:LH) acquisition of Westcliff Medical Laboratories Inc.
The FTC believes the merger of the competing lab test providers could hurt competition in southern California. LabCorp agreed in May to pay $57.5 million for Santa Ana, Calif.-based Westcliff.
Judge Andrew Guilford of the U.S. District Court for Central California denied the FTC’s request for a preliminary injunction on the takeover deal Feb. 22. A day later, the FTC filed the motion to appeal the decision and another request to prevent the companies from closing the transaction until their appeal is decided, according to court documents.
The FTC began its efforts to end the merger in December 2010, arguing that the deal would violate anti-trust laws and eventually increase healthcare costs for SoCal patients.
If LabCorp is allowed to buy Westcliff, the agency contends, it would control 89 percent of the market for critical testing services that southern California physicians use to make diagnoses. Prior to the acquisition, Westcliff offered lower prices than LabCorp for lab services, and prices are likely to rise if the companies merge, according to the FTC.