Anticipated acquisition by Danaher Corporation of Linx Printing Technologies plc

Affected market: Industrial printing/graphics systems and industrial product identification systems

No. ME/1371/04

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.

The OFT's decision on reference under section 33 given on 21 December 2004

PARTIES

Danaher Corporation (Danaher) is a diversified technology company which manufactures and markets industrial and consumer products in the areas of tools/components and process/environmental controls.  It is headquartered in the USA.  Danaher's industrial product identification business is carried out through its USA subsidiary, Videojet Technologies Inc.  Danaher has a UK sales company, Videojet Technologies Ltd.

Linx Printing Technologies plc (Linx) manufactures and markets industrial coding and marking systems for product identification.  Its main products are continuous inkjet (CIJ) printers, laser markers, label markers and consumables for printers. These are manufactured in the UK and China and are distributed worldwide.  Linx's UK turnover in the last financial year was approximately £7.5 million.   

TRANSACTION

On 6 October 2004, Danaher announced its intention to acquire Linx by means of a public bid for its outstanding share capital.  The transaction was notified on 29 October 2004.  The administrative deadline is 24 December 2004.

JURISDICTION

As a result of this transaction, Danaher and Linx will cease to be distinct.  The parties have a combined share of supply in excess of 25 per cent in CIJ printers and laser markers in the UK, so the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met.  The OFT therefore believes that it is the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation. 

ASSESSMENT

The parties overlap in the supply of IPI systems, in particular CIJ printers and laser markers, in the UK.  The merged entity will continue to face competition from several strong global companies and a number of smaller suppliers.  The main customers of the merged entity tend to be large, sophisticated companies that have considerable buyer power, not only because of their size, but also because of the number of suppliers in the market.  While differing views were put forward on barriers to entry, there is evidence of recent new entry in the UK.  Third parties contacted by the OFT did not consider that this transaction raised competition concerns.

Consequently, the OFT does not believe that it is or may be the case that the merger 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 33(1) of the Act.

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