Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Thermo Fisher Scientific Inc. settles FTC charges in acquisition of Life Technologies Corporation, (Jan 31, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC announced today that Thermo Fisher Scientific Inc. (Thermo Fisher), a leading manufacturer of products used in scientific research, has agreed to sell assets to GE Healthcare to settle FTC charges that its proposed $13.6 billion acquisition of Life Technologies Corporation (Life) would likely substantially lessen competition.

Thermo Fisher, headquartered in Waltham, Massachusetts, is a leading global manufacturer and distributor of scientific products and laboratory equipment and consumables. It supplies siRNA reagents under its Dharmacon brand, and cell culture media and sera under its HyClone brand.

Headquartered in Carlsbad, California, Life manufactures and supplies a wide range of laboratory equipment and consumables to customers worldwide. Life sells siRNA reagents under its Ambion brand, and cell culture media and sera under its Gibco brand. Pursuant to an agreement signed on April 14, 2013, Thermo Fisher proposed to acquire Life for approximately $13.6 billion.

The FTC complaint (In re Thermo Fisher Scientific Inc., Docket No. C-4431, File No. 131-0134), challenging the transaction alleges that the deal, as it was originally proposed, would have eliminated close competition between Thermo Fisher and Life and substantially increased concentration in the markets for short/small interfering ribonucleic acid (siRNA) reagents, cell culture media, and cell culture sera, enabling the combined firm to raise prices and reduce quality for consumers.

According to the FTC complaint, aside from Thermo Fisher and Life, there are few meaningful competitors in the relevant markets. Moreover, the two merging companies are particularly close competitors in each relevant market and, because they are difficult markets to enter, the deal as proposed would likely substantially lessen competition in each market. The FTC alleges that the combined company would have a share of more than 50 percent of the worldwide market for individual siRNA reagents, and greater than 90 percent of the market for siRNA reagent libraries. Post-acquisition, Thermo Fisher would have at least a 50 percent share of the worldwide market for cell culture media, and 60 percent of the market for cell culture sera.

The proposed order settling the FTC’s charges requires Thermo Fisher to divest its gene modulation business Dharmacon, which contains the siRNA reagents business, as well as its cell culture media and sera business including the HyClone brand to GE Healthcare, along with all intellectual property and know-how necessary to operate each of the divested businesses. GE Healthcare, which is headquartered in the United Kingdom, has the experience, reputation, and resources to maintain the benefits of competition that otherwise would have been lost as a result of the acquisition.

Competition enforcement agencies around the world reviewed this transaction. Throughout the investigation, FTC staff cooperated with antitrust agencies in Australia, Canada, China, the European Union, Japan, and Korea, often working closely with the staff of these agencies on the analysis of the proposed transaction and potential remedies to reach outcomes that benefit consumers in the United States.

The Commission vote to accept the agreement containing the proposed consent order for public comment was 4-0.

Companies: Thermo Fisher Scientific Inc.; Life Technologies Corporation

News: Antitrust FederalTradeCommissionNews