Thermo Fisher ($TMO) has finally grabbed what it needed to close its $13.6 billion buyout of Life Technologies--U.S. antitrust approval. But there are strings attached. For the merger to go through, the Massachusetts laboratory equipment giant must sell some divisions to GE Healthcare ($GE) in an arrangement that mirrors similar deals with European and Chinese regulators.
The Federal Trade Commission, in noting its decision, said that Thermo must sell off three divisions to keep the M&A deal from harming competition. They include a Massachusetts arm (Dharmacon) that produces siRNA reagents, which are used to study gene function. Also to be sold off: divisions that produce cell culture media (salts, sugars, amino acids) and cell culture sera, which is produced from animal blood to facilitate the growth of mammalian cells in the lab. Both are produced under the HyClone name.
FTC officials had noted that outside of Thermo Fisher and Life, "there are few meaningful competitors in these three relevant markets." Regulators added that the combined company, without selling off the affected divisions, would have had a more than 50% share of the global siRNA reagent market, and over 90% of the market for siRNA reagent libraries. As well, they said the merger without the divestiture would give Thermo Fisher at least 50% of the global market for cell culture media and 60% of the cell culture sera space.
Earlier in January, Thermo Fisher said it would sell its gene modulation, cell culture and magnetic beads divisions to GE Healthcare for $1.1 billion to satisfy demands from the European Commission. Chinese regulators signed off on the deal a week later, assuming Thermo lowers the cost of two products sold in China, sells its cell culture and gene adjustment units and gets rid of its 51% ownership stake in China's Lanzhou National Hyclone Bio-engineering.
Thermo had said it hoped to close its merger with Life early this year once it won U.S. regulatory approval. With that piece finally in place, an official announcement from Thermo will be quick to follow.
This M&A deal spurred major global interaction between various regulatory agencies. The FTC said it worked with antitrust counterparts in Australia, Canada, China, the European Union, Japan and Korea.
- here's the FTC announcement in full
- read Bloomberg's take