The European Commission has approved this month, under the EU Merger Regulation, the proposed acquisition of General Electric’s Healthcare Life Sciences Biopharma Business by Danaher Corporation. The approval is conditional on the divestiture of a remedy package.
Danaher Corporation (“Danaher”) and General Electric’s Healthcare Life Sciences Biopharma Business (“GE Biopharma”) are both active in the manufacturing of products and services used in the bioprocessing industries, such as single-use technology products (bioreactors, mixers or connectors), cell culture media and sera, microcarriers, bioprocessing filtration and chromatography products. The companies are also competitors in other life sciences areas, such as molecular characterisation, microscopy, high-content screening and laboratory filtration. Products and services in those areas are used for academic research, as well as applied research in the bioprocessing and other industries.
The Commission reached out to customers and competitors to understand the competitive constraints that the merging companies exert on each other and the likely changes that would occur in that regard following the proposed transaction.
Following its investigation, the Commission had serious doubts that the transaction as notified would have reduced competition and resulted in higher prices, less innovation and the risk of discontinuation of certain products in the following markets:
The Commission did not find competition concerns in several other markets part of the Single Use Technology, bioprocess filtration, chromatography areas, and as well other life sciences areas like microscopy or laboratory filtration.
In order to address the Commission concerns, Danaher committed to divest five of its businesses:
Danaher committed to sell these businesses to a purchaser with experience in the supply of biotech equipment and/or consumables in Europe, Middle East and Africa (EMEA), the Americas and Asia. The final sale of these businesses are conditional upon the Commission’s approval of the buyer. In its buyer approval process, the Commission will ensure that the divestiture does not raise competition concerns and that the divested businesses will operate as a viable and competitive force.
On this basis, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. This decision is conditional on full compliance with the commitments.
[Excerpted from European Commission Press Release of 18 December 2019]