The Federal Trade Commission will require Corning, Inc. to transfer assets and to supply some of its laboratory products to another company, under a proposed settlement that resolves charges that Corning’s proposed acquisition of Becton, Dickinson and Company’s Discovery Labware Division would otherwise be anticompetitive.
Under the FTC settlement, Corning will provide assets and assistance to enable life science company Sigma-Aldrich Co., LLC to manufacture Corning’s line of tissue culture treated (TCT) dishes, multi-well plates, and flasks in a manner substantially similar to Corning’s process. Until Sigma Aldrich develops its own manufacturing capabilities for these products, Corning will supply them to Sigma Aldrich to be marketed under Sigma Aldrich’s own brand, allowing Sigma Aldrich to immediately replace the competition lost as a result of Corning’s acquisition of Discovery Labware.
Corning, headquartered in Corning, New York, is a leading manufacturer of specialty glass, plastics, and ceramics for a variety of applications. Its Life Sciences division is a leading maker of plastic labware, including TCT cell culture multi-well plates, dishes, and flasks. TCT cell culture plates are plastic containers that essentially are surfaces on which researchers grow cells. They are used primarily by researchers at drug companies, bio-tech firms, and universities in their cell culture work.
Discovery Labware, Inc., is a division of Becton, Dickinson, and is based in Bedford, Massachusetts. Becton, Dickinson is a global medical technology company that supplies plastic labware through Discovery Labware, including TCT cell culture multi-well plates, dishes, and flasks.
Under an agreement dated April 12, 2012, Corning proposes to acquire Becton, Dickinson’s Discovery Labware Division. The FTC’s complaint alleges that the proposed acquisition would be anticompetitive and would violate the FTC Act and Section 7 of the Clayton Act in the U.S. markets for TCT multi-well plates, dishes, and flasks used in cell culture applications.
The FTC’s complaint alleges that the North American markets for TCT cell culture products are highly concentrated. Corning and Becton, Dickinson’s Discovery Labware Division are the leading suppliers in each market. Other suppliers, such as Thermo Fisher and Greiner Bio-One compete in each market, but no other suppliers are the size of Corning or the Discovery Labware Division.
The complaint states that the acquisition as proposed would eliminate the direct competition that currently exists between Corning and Becton, Dickinson’s Discovery Labware Division in the markets for TCT cell culture vessels. In addition, by increasing Corning’s share in each market the proposed deal would eliminate its most significant competitor, allowing it to raise prices for these important labware products.
The proposed consent order is designed to remedy the anticompetitive effects of the acquisition by requiring Corning to supply Sigma Aldrich with the products so that it can immediately begin selling TCT cell culture products. At the same time, Corning will provide Sigma Aldrich with certain manufacturing assets and the necessary technical assistance to begin manufacturing TCT cell culture multi-well plates, flasks, and dishes in a manner similar to how Corning currently makes them.
According to the FTC, Sigma Aldrich, headquartered in St. Louis, Missouri, has an existing infrastructure for marketing and selling lab ware products, and is well-positioned to replace the competition lost in the market as a result of Corning’s acquisition of Becton, Dickinson. Finally, under the proposed order, at any time after the consent agreement is signed, the FTC can appoint an interim monitor to oversee the supply of products and transfer of assets to Sigma Aldrich.
The Commission’s vote approving the complaint and proposed settlement order was 5-0. The order will be subject to public comment for 30 days, until November 30, 2012, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments also can be submitted electronically.
NOTE: The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. A consent agreement 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 $16,000.
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