Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Conditions Corning’s Proposed Acquisition of Discovery Labware on Asset Transfers, (Oct 31, 2012)

By William Zale, J.D.

The FTC announced October 31 that it will require Corning, Inc. to transfer assets and to supply some of its laboratory products to another company, under a proposed settlement that resolves charges that Corning’s proposed acquisition of Becton, Dickinson and Company’s Discovery Labware Division would otherwise be anticompetitive.

Under the FTC settlement, Corning will provide assets and assistance to enable life science company Sigma-Aldrich Co., LLC to manufacture Corning’s line of tissue culture treated (TCT) dishes, multi-well plates, and flasks in a manner substantially similar to Corning’s process. Until Sigma Aldrich develops its own manufacturing capabilities for these products, Corning will supply them to Sigma Aldrich to be marketed under Sigma Aldrich’s own brand, allowing Sigma Aldrich to immediately replace the competition lost as a result of Corning’s acquisition of Discovery Labware.

According to the FTC’s complaint, the proposed acquisition would be anticompetitive and would violate the FTC Act and Section 7 of the Clayton Act in the U.S. markets for TCT multi-well plates, dishes, and flasks used in cell culture applications. The FTC alleges that the North American markets for TCT cell culture products are highly concentrated. Corning and Becton, Dickinson’s Discovery Labware Division are the leading suppliers in each market. Other suppliers, such as Thermo Fisher and Greiner Bio-One compete in each market, but no other suppliers are the size of Corning or the Discovery Labware Division.

The complaint states that the acquisition as proposed would eliminate the direct competition that currently exists between Corning and Becton, Dickinson’s Discovery Labware Division in the markets for TCT cell culture vessels. In addition, by increasing Corning’s share in each market the proposed deal would eliminate its most significant competitor, allowing it to raise prices for these important labware products.

The proposed consent order is designed to remedy the anticompetitive effects of the acquisition by requiring Corning to supply Sigma Aldrich with the products so that it can immediately begin selling TCT cell culture products. At the same time, Corning will provide Sigma Aldrich with certain manufacturing assets and the necessary technical assistance to begin manufacturing TCT cell culture multi-well plates, flasks, and dishes in a manner similar to how Corning currently makes them.

News: Antitrust FederalTradeCommissionNews