For hospital mergers, the latest change to German merger control law shifts powers more markedly away from the Federal Cartel Office and to the level of the 16 states (“Länder”). Even if the revenue thresholds for the application of German merger control law are exceeded, hospital mergers will need to be notified first to the authority of the state that is responsible for hospital planning. The planning authority of this state (or if more than one state is concerned the authorities of several states) can issue a confirmation that the merger is necessary to improve hospital care. Only if this confirmation is denied or not issued within three months the parties are allowed to file a merger control notification with the Federal Cartel Office (FCO). This deviation from the usual merger control law increases the states’ influence on the structure of the hospital market, while the number of cases in which the FCO is permitted to review hospital mergers continues to decline. The new rules, which also aim to resolve legal uncertainties, entered into force on 15 April 2026, as the new Section 186a of the German Act Against Restraints of Competition (ARC).

This amendment is already the second revision of the exemption for hospital mergers introduced at the end of 2021. Originally, the exemption from the scope of German merger control applied only to mergers supported by public moneys from a specific fund (the Hospital Structure Fund). The states considered this exemption too restrictive. At the end of 2024, a so-called “consolidation window” was opened until the end of 2030, which removed merger control for all those hospital mergers that involved a “cross-location concentration” of hospitals. From this amendment on, hospitals in some cases had a choice: either they applied for merger control clearance from the FCO – or they obtained confirmation from the hospital planning authority that the merger was necessary to improve hospital care. Strategically, it was advantageous to file with the FCO projects that did not raise competition concerns, while addressing transactions involving greater market concentration to state authorities, which tend to prioritize healthcare and structural policy considerations.

With the new section 186a ARC, the exemption is no longer linked to the elusive concept of “cross-location concentration,” but rather to well-known concepts of merger control. This leads to clearer rules and especially removes the speculation that the closure of hospital locations might be a prerequisite for the exemption. The exemption is thus intended to facilitate consolidation without forcing a reduction in beds or locations. In terms of scope, the provision covers all traditional forms of hospital care: inpatient, inpatient-equivalent, day-care, and semi-inpatient care, as well as pre- and post-hospitalization care and outpatient services.

At the same time, the new law draws clear boundaries: outpatient services that are not traditional forms of hospital care are expressly excluded from the exception. The merger of medical care centers therefore does not fall under the exemption and remains – if the revenue thresholds of German merger control law are exceeded – fully subject to an ex ante review by the FCO. The same applies to mergers of preventive care and rehabilitation facilities: They, too, do not benefit from the exemption and remain subject to notification and approval requirements if they reach the relevant turnover or transaction value thresholds.

In practice, this means for hospital operators and investors: The state’s hospital planning decision becomes the first and decisive hurdle for any major hospital merger. Without a confirmation of one or several hospital planning authorities or three months of inaction by the state authority, the path to the FCO is blocked. Transaction strategies must therefore be aligned even more closely with the respective state hospital planning and the structural goals pursued therein. At the same time, traditional antitrust law remains highly relevant in the healthcare sector – particularly for medical care centers and rehabilitation facilities, but also for scenarios where the scope of the new exemption does not apply. Overall, the initial review of hospital mergers is thus shifting even more away from the purely competition-law perspective of the FCO toward a more care-oriented approach by the states, while nationwide merger control now serves only as a secondary option.