Completed acquisition by Advanced Medical Optics Inc. of Pfizer Inc.'s Surgical Ophthalmic Business

Affected market: Ophthalmic business

No. ME/1179/04

Please note that the full text of the decision can be downloaded by using the link on the right . What follows are extracts regarding the parties, the transaction, jurisdiction, assessment and decision.

Please note that square brackets indicate information excised, or exact figures replaced by a range, at the parties' or third parties' request

The OFT's decision on reference under section 22 (1) given on 23 July 2004

PARTIES

Advanced Medical Optics Inc. (AMO) is a global supplier of ophthalmic surgical products. Specifically it is active in the research & development (R&D), manufacture and supply of phaco-emulsification machines (phaco equipment), intraocular lenses (IOLs) and various disposables surgical products (disposables).

Surgical Ophthalmic Business (SB) is a global manufacturer of ophthalmic surgical products. SB supplies viscoelastic solutions for ocular surgery, IOLs and various disposables. SB is owned by Pfizer Inc. (Pfizer), a global pharmaceutical company active in health care, animal health and consumer health care.

TRANSACTION

AMO has acquired Pfizer's SB in a $450 million all-cash transaction. The assets acquired include the Healon® line of viscoelastic products, the CeeOn® and the Tecnis® IOLs and the Baerveldt® glaucoma shunt. AMO has also acquired related R&D and manufacturing facilities in Groningen, Netherlands; Uppsala, Sweden; and Bangalore, India.

The transaction was announced on 21 April 2004 and completed on 28 June 2004. The 40-day administrative deadline expires on 13 September 2004. The 4-month statutory deadline expires on 28 October 2004.

JURISDICTION

AMO and SB have ceased to be distinct enterprises. They primarily overlap in IOLs, where their share of supply exceeds 25 per cent of the UK market ([20-30] per cent with an increment of [0-10]) per cent meeting the share of supply test in section 23 of the Enterprise Act 2002 (the Act). The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

ASSESSMENT

The parties overlap primarily in the supply of IOLs. The merger will enhance AMO's position as the second largest supplier of IOLs in the UK. Direct overlaps in other segments are minimal.

As viscoelastics and IOLs are highly complementary, third parties have raised some foreclosure concerns. The evidence gathered does not support the proposition that AMO has either the ability or incentives to foreclose rivals, in particular, by linking in purchases of IOLs to viscoelastics. 
 
Consequently, the OFT does not believe that it is or may be the case that the merger has resulted, or may be expected to result, in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22 (1) of the Enterprise Act.

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