The Australian Competition and Consumer Commission today announced that it will not oppose the proposed acquisition of Varian Inc by Agilent Technologies Inc after competition concerns were resolved by Agilent's undertaking to sell certain global scientific instrument assets.
Agilent and Varian are global suppliers of scientific instruments, including laboratory analytical and life sciences instruments. Their proposed merger has been reviewed by a number of competition agencies around the world.
After consultation with a range of market participants, including laboratories, mining companies, universities and research institutions, government agencies and other manufacturers, the ACCC identified a number of scientific instrument markets where divestitures were required to address competition concerns.
"The ACCC was concerned that the proposed acquisition, in the absence of these divestitures, would have led to higher prices for key scientific instruments and reduced choice for laboratories, mining companies, universities and research institutions," ACCC chairman Graeme Samuel said today.
Agilent and Varian are two of a small number of significant suppliers of laboratory gas chromatographs, micro-portable gas chromatographs, triple quadrupole gas chromatograph mass spectrometers and inductively coupled plasma mass spectrometers in Australia.
Throughout its review of the proposed acquisition, the ACCC liaised closely with the European Commission and the Federal Trade Commission in the United States. In order to address competition concerns identified by the European Commission, Agilent agreed to divest its global micro-portable gas chromatography business and Varian's global laboratory gas chromatography, triple quadrupole gas chromatograph mass spectrometry and inductively coupled plasma mass spectrometry businesses. Although sale agreements have been publicly announced in relation to the global businesses to be divested, the EC and FTC are yet to make a decision on whether to approve the relevant proposed purchasers.
To address the ACCC's competition concerns, the parties agreed to provide an enforceable undertaking under section 87B of the Trade Practices Act 1974 which gives effect to the global divestitures in Australia. The undertaking also provides upfront ACCC approval of the proposed purchasers of the global businesses to be divested – Inficon Inc as purchaser of Agilent's global micro-portable gas chromatograph business and Bruker Inc as purchaser of Varian's global laboratory gas chromatograph, triple quadrupole gas chromatograph mass spectrometer and inductively coupled plasma mass spectrometer businesses. In the event that Agilent fails to complete divestitures to Inficon or Bruker, the undertaking requires Agilent to obtain ACCC approval of any alternative purchasers.
"Divestiture of the relevant businesses to Inficon and Bruker, both of which have established and effective distribution arrangements in Australia, will create viable, effective, independent and long term competitors to Agilent and thereby address the ACCC's competition concerns," Mr Samuel said.
"The ACCC is therefore satisfied that the proposed acquisition of Varian by Agilent, taking into account the enforceable undertaking provided by Agilent, is unlikely to substantially lessen competition," Mr Samuel said.
The ACCC will issue a public competition assessment, providing an explanation for its view on the proposed acquisition and the undertaking, in due course.
Section 50 of the Trade Practices Act 1974 prohibits mergers and acquisition that would have the effect, or be likely to have the effect, of substantially lessening competition in a market.