On October 31st, the European Commission cleared the proposed acquisition of Bayer Diagnostics, the diagnostic division of Bayer Healthcare, a business unit of Bayer AG of Germany, by Siemens AG of Germany. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it.
Siemens is active in various manufacturing, technology and services business activities, including medical systems. Within the latter, Siemens is notably active in the in-vitro diagnostic (“IVD”) sector following the acquisition of Diagnostic Products Corporation on July 28, 2006. Bayer Diagnostics develops, manufactures and markets IVD systems for hospitals and medical laboratories. IVD systems are made of dedicated equipment and reagents that allow the carrying out of diagnostic tests to identify and measure substances in samples (e.g. tissue or blood) taken from patients.
Both firms are active in the immunochemistry business, a sub-segment of IVD, which involves diagnostics for fertility, allergies, cancer and other pathologies. The merger created one of the leading groups in the European and world markets for immunochemistry. However, the market investigation revealed that the horizontal overlaps between the activities of Siemens and Bayer Diagnostics would not result in the ability to increase prices for laboratories or consumers.
Customers and competitors identified a large number of alternative immunochemistry test firms in a position to replace Siemens and Bayer Diagnostics in case of price increases. Indeed, there continuess to be intense competition in these markets coming from several players with significant market shares and strong reputations. Furthermore, Siemens and Bayer Diagnostics currently have slightly different market positioning within the immunochemistry area.
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