Danaher Corporation executed a stock purchase agreement valued at $650 million with MDS, Inc., through which Danaher would acquire MDS, inclusive of its Arcturus Life Sciences Business, in September 2009. The FTC filed a Complaint alleging that MDS’ Arcturus business and Danaher’s Leica Microsystems were two of only four suppliers of laser microdissection devices to North America. The Complaint alleged that the post-merger share of the merged company would be greater than 50% of the North American market.
Laser microdissection devices are used in fields of molecular pathology, cell biology, oncology, and forensic medicine to separate cells from tissue in order to study disease progression or effectiveness of particular treatments. Although other cell separation techniques may exist, laser microdissection devices are the most precise and consistent and therefore were alleged to constitute a separate antitrust product market. The FTC alleged a geographic market of the U.S. or North America – in either case the number and list of competitors remains the same. Customers allegedly require a service and support infrastructure and rely heavily on the reputation of the device among colleagues in their purchase decisions. Accordingly, the FTC posited that a new firm or foreign firm attempting to expand into the market would face high barriers to entry because of the difficulty in building a strong reputation in a short amount of time.
Danaher and MDS entered into a proposed consent with the FTC on January 27, 2010. The consent would require the divestiture of MDS’ Arcturus device and related reagents to Life Technologies, a California company doing business in the reagents business, which has the same customer base as microdissection device sales.