FTC Order Preserves Competition in Market for Important Scientific Research Device, While Allowing Danaher to Proceed with Purchase of MDS Analytical Technologies

The Federal Trade Commission announced today that it will require the divestiture of MDS Inc.’s assets related to its laser microdissection business as a condition of allowing Danaher Corporation and MDS Analytical Technologies (US) Inc. to proceed with their proposed merger. The proposed settlement is designed to preserve competition in the North American market for laser microdissection devices – a key tool for scientific research.

The parties have agreed to an FTC order requiring them to sell assets related to MDS’s Arcturus brand of laser microdissection devices to Life Technologies Corp. to resolve FTC charges that Danaher’s acquisition of MDS Analytical Technologies would harm competition in the North American market for laser microdissection devices. Danaher and MDS are two of only four North American suppliers of these devices, which are used to separate small groups of cells – or even one cell – from larger tissue samples for specialized testing, such as DNA analysis, RNA analysis, or protein profiling.

“The Commission’s order will protect competition in the specialized and highly concentrated market for laser microdissection devices, leading to lower costs and increased innovation,” said FTC Bureau of Competition Director Richard Feinstein.

Danaher, based in Washington, DC, and MDS (the parent company of MDS Analytical Technologies), headquartered in Ontario, Canada, are direct competitors in the four-firm North American market for laser microdissection devices. The devices are fully integrated machines that incorporate a laser, a computer, and a monitor with a microscope. Although other techniques may be used to separate cells, none are as precise or reliable as laser microdissection.

The acquisition, as it was originally proposed, would have combined Danaher’s Leica brand of devices with MDS’s Arcturus brand. The FTC contends that the combination would have led to increased prices and decreased innovation for this type of equipment. Moreover, entry by a new firm is unlikely to offset the anticompetitive effects of the proposed acquisition, according to the FTC complaint.

Under the proposed order, Danaher and MDS must sell to Life Technologies all of the products and equipment that Life Technologies needs to operate the laser microdissection business. MDS must make all key Arcturus employees available to Life Technologies, as well as any other employees who may be needed to ensure the divestiture is a success. In addition, MDS must provide Life Technologies with all of the intellectual property and patent licenses necessary to compete immediately in the North American laser microdissection market.

The Commission vote to issue the complaint and approve the proposed consent order was 4-0. The FTC is accepting comments on the proposed order for 30 days, until March 1, 2010, after which it will decide whether to make the order final. Comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC, 20580. Comments also can be submitted electronically at: https://public.commentworks.com/ftc/DanaherMDS.

NOTE: A consent order is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

Copies of the consent order are now available on the FTC’s Website and as a link to this press release. The FTC’s Bureau of Competition works with the Bureau of Economics to
investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(FTC File No. 091-0159)
(Danaher.final.wpd)