FTC to challenge LabCorp buy of small rival

WASHINGTON (BestGrowthStock) – Federal antitrust regulators are challenging Laboratory Corporation of America’s (LH.N: ) acquisition of small, financially troubled Westcliff Medical Laboratories, the Federal Trade Commission said on Wednesday.

The agency, which divides the work of antitrust enforcement with the Justice Department, said the $57.5 million deal “would lead to higher prices, lower quality.”

It also said the deal, which was done in May, would harm competition in southern California. Westcliff filed for bankruptcy in May 2010.

The deal did not undergo antitrust review before closing because of its small size. Antitrust regulators also rarely challenge acquisitions involving companies in bankruptcy.

LabCorp had said in a regulatory filing in July that the FTC was looking at the transaction, and that it had entered into an agreement with the FTC to hold Westcliff independent.

“Competition is one of the keys to keeping health care costs under control and ensuring that patients receive high-quality care, and laboratory services are an essential part of that,” said Richard Feinstein, director of the FTC’s Bureau of Competition in an email statement.

LabCorp could not immediately be reached for comment.

FTC to challenge LabCorp buy of small rival