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OFT refers completed acquisition by Thermo Electron Manufacturing of GV Instruments

179/06    15 December 2006

The OFT today referred the completed acquisition by Thermo Electron Manufacturing Limited (Thermo) of GV Instruments Limited (GVI) to the Competition Commission (CC).

The OFT has decided that the test for reference is met in relation to the supply of Isotope Ratio Mass Spectrometers. These are sophisticated measuring instruments used worldwide mainly by universities, research institutions and the nuclear industry.

The OFT opened an investigation in response to customer concerns after the merger completed. Upon request, Thermo provided the OFT with initial undertakings to prevent further business integration pending the outcome of the merger investigation.

Vincent Smith, OFT Senior Director for Competition, said:

'Thermo has taken the antitrust risk of completing this deal without approaching the OFT first. The transaction appears to us to be a merger to near monopoly in two segments of Isotope Ratio Mass Spectrometers and leaves only two suppliers in a third segment. Although there is evidence to suggest that GVI would probably have exited the market had it not been bought by Thermo, we had no choice but to conclude that there may have been other realistic purchasers of GVI or its assets – and these would not have created a monopoly. As such, we have a duty to refer this case to the CC for further investigation.'

Simon Pritchard, Director of Mergers, OFT said:

'We are prepared to offer informal advice free of charge to small and medium size UK firms in distress that, like GVI, seek to sell to a major competitor. This can help businesses manage antitrust risk and avoid the disruption of merger investigations once the deal is already complete.'

The CC is expected to report by 31 May 2007.

NOTES
 
1. The Reference Test - the OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that a relevant merger situation has been created; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

2. Under the Enterprise Act 2002 a relevant merger situation is created if two or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.

3. 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.

4. The text of this decision will be published in the mergers section as soon as is reasonably practicable.

5. The Competition Pro Bono Scheme established by the private sector is also recommended to small and medium size firms needing competition law advice. See the Competition Pro Bono Scheme website.

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