Tuesday, May 18, 2010

FTC Approves Combination of Scientific Equipment Manufacturers

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Agilent Technologies Inc., a supplier of scientific measurement instruments, closed it acquisition of medical device and software maker Varian, Inc. on May 14, after the parties entered into a proposed FTC consent order.

Under the terms of the proposed consent order, the companies agreed to sell three product lines in order to resolve FTC antitrust concerns over their combination.

According to the FTC's complaint, with the divestitures, Agilent's acquisition of Varian would have violated U.S. antitrust laws by reducing competition for three types of scientific measurement instruments in which the companies competed with one another.

The companies competed in the markets for the production and sale of micro gas chromatography instruments (Micro GCs), triple quadrupole gas chromatography-mass spectrometry instruments (3Q GC-MS), and inductively coupled plasma-mass spectrometry (ICP-MS) instruments.

The FTC contended that in each market, without the proposed divestitures, the acquisition would have allowed Agilent to raise prices, decrease innovation, or reduce customer service. According to the complaint, Agilent and Varian were the only two competitors producing Micro GCs, and the acquisition would leave Agilent with a monopoly in that market.

Similarly, in the 3Q GC-MS and ICP-MS markets, there are currently only four competing firms. Eliminating the competition between Agilent and Varian would leave Agilent with a post-merger market share of nearly 50 percent in each market.

With the closing of the deal, which "brings together two Silicon Valley pioneers," Agilent was now positioned as a leading provider of analytical instrumentation to the applied and life sciences markets, the company said in a May 14 statement.

The complaint and proposed consent order, In the Matter of Agilent Technologies, Inc., FTC File No. 0910135, announced May 14, 2010, are available on the FTC website. Further details will appear in CCH Trade Regulation Reporter.

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