Antitrust Law Daily Wrap Up, TOP STORY: FTC challenges Steris Corp.’s $1.9B acquisition of Synergy Health, (May 29, 2015)

By Greg Hammond, J.D.

The FTC issued an administrative complaint today, challenging Steris Corp.’s proposed acquisition of Synergy Health plc. According to the Commission, the $1.9 billion transaction would significantly reduce future competition in regional markets for sterilization of products using radiation, in violation of antitrust laws (FTC v. Steris/Synergy Health, File No. 151 0032).

The FTC alleged that both companies offer contract sterilization services that ensure products, such as medical devices and human tissue products, are free of undesirable microorganisms prior to reaching consumers. Today, gamma radiation is considered the only feasible method of sterilizing large volumes of dense and heterogeneously packaged products, according to the Commission. Only Steris and one other company provide contract gamma sterilization services in the United States. However, at the time the proposed merger was announced, Synergy was implementing a strategy to open contract x-ray sterilization services in the United States.

The Commission believes that it is unlikely that new competitors in the market for contract radiation sterilization services would replicate the competition that would be eliminated by the merger. Rather, the proposed transaction would eliminate likely future competition between Steris’ gamma sterilization facilities and Synergy’s planned x-ray sterilization facilities in the United States, depriving consumers of alternative sterilization services and additional competition, the agency claimed.

The FTC is additionally seeking a temporary restraining order and preliminary injunction to prevent the proposed merger.

Companies: Steris Corp.; Synergy Health plc

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