Newsroom

OFT refers proposed acquisition by Drager Medical of Air-Shields

PN 173/03    18 December 2003

The OFT today referred the proposed acquisition by Drager Medical AG & Co. KGAA of Air-Shields from Hillenbrand Industries Inc to the Competition Commission (CC).

The OFT has referred the merger because it believes that if it went ahead it might be expected to result in a substantial lessening of competition in the supply of neo-natal warming therapy products in the UK, which include closed care incubators and open warming beds for very young (including premature) babies.

Given the OFT's view that this merger gave rise to a significant prospect of a substantial lessening of competition there was no need for the OFT to assess it further in relation to the interpretation of the test for reference given by the Competition Appeal Tribunal in its recent judgment in IBA Health Ltd v OFT [2003] CAT 27.

John Vickers, Chairman of the OFT, said:

'The parties are the two biggest suppliers of neo-natal warming products to hospitals in the UK. There are grounds for significant concern that the merger could lessen competition to the detriment of customers.  Further investigation by the CC is required to assess these issues.'

The CC is required to publish its report by 3 June 2004.

NOTES

1. The Enterprise Act 2002 empowers the Office of Fair Trading to refer to the CC actual or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or which involve the acquisition of turnover in the UK of over £70m.

2. The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.

3. In a press release dated 5 December 2003 (PN 164/03) following the CAT's judgment in IBA Health Ltd v Office of Fair Trading, the OFT stated that in relation to current and future cases it would apply the CAT's interpretation of the statutory test for reference.  On 11 December 2003, the OFT announced its intention to appeal the CAT's judgment in this case.

Back to:2003