CELEX: 32014M7326
Language: en
Date: 2014-11-28 00:00:00
Title: Commission Decision of 28/11/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7326 - MEDTRONIC / COVIDIEN) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 28.11.2014
C(2014) 9215 final

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To the notifying party:

Dear Madam(s) and/or Sir(s),

Subject:    Case M.7326 – Medtronic/ Covidien
Commission decision pursuant to Article 6(1)(b) in conjunction with Article 6(2) of Council Regulation No 139/2004[1] and Article 57 of  the  EEA
Agreement

 1) On 10 October 2014, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation
    by which the undertaking Medtronic, Inc. ("Medtronic", US) acquires within the meaning of Article 3(1)(b) of the Merger  Regulation  control
    of the whole of Covidien plc ("Covidien", Ireland) by way of public  bid  ("the  Transaction").  Medtronic  and  Covidien  are  collectively
    referred to as "the Parties".[2]

       THE PARTIES

 2) Medtronic develops medical technology and provides products, therapies and services treating a  variety  of  medical  conditions,  including
    cardiac and vascular diseases, diabetes, and neurological and musculoskeletal conditions. It is headquartered in Minneapolis, Minnesota  and
    employs over 46 000 people in more than 140 countries.

 3) Covidien is active in the development, manufacturing and sale of a diverse range of medical  devices  and  supply  products,  including  for
    laparoscopic surgery, electrosurgery, biosurgery and vascular therapies. Covidien employs more than 38 000 people in more than 70  countries
    and sells its products in more than 150 countries worldwide.

       THE OPERATION AND THE CONCENTRATION

 4) On 15 June 2014, Medtronic announced its intention to acquire sole control over Covidien. The Transaction is  structured  as  a  public  bid
    under the Irish Takeover Code and is expected to close at the end of 2014.

 5) Post-Transaction, the businesses of Medtronic and Covidien will be combined under a new entity to be  called  Medtronic  plc.  The  combined
    entity will maintain Medtronic's operational headquarters in Minneapolis and have its principle  executive  offices  in  Covidien's  current
    headquarters in Ireland. Medtronic will continue to be a public company listed on the New York Stock Exchange and will not be controlled  by
    any shareholder.

 6) Therefore, the Transaction constitutes a concentration within the meaning of Article 3(1)(b) of the EU Merger Regulation.

       EU DIMENSION

 7) The undertakings concerned have a combined aggregate worldwide turnover of more than EUR 5 000 million.[3]  Each  of  them  has  an  EU-wide
    turnover in excess of EUR 250 million, but each does not achieve more than two-thirds of its aggregate EU-wide turnover within one  and  the
    same Member State. The notified operation therefore has an EU dimension pursuant to Article 1(2) of the EU Merger regulation.

       ASSESSMENT

1 Introduction

 8) The transaction is essentially complementary in nature with Medtronic being primarily active in the treatment  of  heart  diseases  (in  the
    various markets of cardiac rhythm disease management, coronary segment  and  structural  heart),  spine  implants,  neurology  and  diabetes
    treatment, where Covidien is not active. Nevertheless, the Parties' activities overlap in the area of peripheral  vascular  devices  and  in
    (advanced) electrosurgical devices.

 9) Medtronic used to overlap with Covidien also in relation to laparoscopic devices and  non-advanced  electrosurgical  devices  (open  surgery
    electrosurgical forceps and laparoscopic active electrodes). However, on 17 September 2014, Medtronic  announced  that  it  had  reached  an
    agreement with Integra Life Sciences to sell its MicroFrance business, consisting of its laparoscopic and electrosurgical devices. The  sale
    was closed on 27 October 2014. The divestment of MicroFrance  eliminates  the  overlaps  between  Medtronic  and  Covidien  in  relation  to
    laparoscopic devices and non-advanced electrosurgical devices. The only devices which Medtronic kept in its portfolio in this space are  its
    advanced energy devices PlasmaBlade, Aquamantys and its monopolar sealers, large surface coagulation devices that are not marketed under the
    Aquamantys brand.

2 Peripheral vascular devices

10) Peripheral vascular ("PV") or endovascular devices are used for the minimally invasive treatment of peripheral  vascular  (or  endovascular)
    diseases.

11) PV surgeries are carried out by interventional radiologists (around 50% of the time), vascular surgeons (around 40% of  the  time),  and  by
    interventional cardiologists (around 10% of the time). A typical PV procedure  involves  the  following  steps  (which  have  been  somewhat
    simplified)[4]:

 a) An X-ray is used to locate the relevant vessel and the blockage or "lesion",

 b) An introducer needle is then applied to gain entry through the skin and into the artery or vein. A sheath is inserted over the needle.  Some
    interventions may be performed using only a sheath.

 c) Depending on how severe the lesion is, different devices are introduced to reach and potentially open the blockage:

  – Where required, a guidewire is inserted through the needle and into the artery or vein to maintain entry to the lesion and  to  serve  as  a
    "guide" to enable the entry of other devices. Guidewires may be used in conjunction with a guide catheter, which facilitates entry but  also
    allows a "contrast medium"[5] to be used to enable the interventionist  to  monitor  the  position  of  the  devices  with  an  X-ray  or  a
    fluoroscopy. Once the guidewire is inserted, the introducer needle is removed.

  – If the lesion is particularly severe and cannot be reached with only a guidewire, a support catheter (a  stronger,  more  rigid  device)  is
    introduced to "push" through the blockage of the lesion.

  – If the vessel is entirely blocked and cannot be "pushed" through, a chronic total occlusion ("CTO") crossing device is introduced to  either
    go around the lesion by cutting into the sub-intimal part of the vessel or by using micro-dissection (i.e. scissor-like cutting).[6]

 d) Using the guidewire or a support catheter as a guide, a Percutaneous Transluminal Angioplasty ("PTA") balloon catheter is inserted  and  fed
    to the lesion. Once at the point of the lesion, the PTA balloon catheter is expanded and pushes the plaque against the wall of  the  vessel,
    allowing blood to flow.

 e) Where lesions are more prone to restenosis,[7] or where there is a tear in the vessel, the interventionist may insert and deploy a stent,  a
    drug coated balloon (DCB), or a drug-eluting stent (DES).

  – Balloon expanding stents ("BX stents") are stents mounted on a PTA balloon catheter. As the balloon is expanded, the stent,  which  is  made
    of rigid material, expands, and then stays in place once the balloon is removed.

  – Other stents are self-expanding stents ("SX stents") and have their own plastic delivery mechanism, which is inserted separately  from,  and
    subsequent to, the PTA balloon catheter.

12) PV diseases may impede blood supply in the vessels of various parts of the body according to which PV procedures are distinguished:

  - Brain (carotid arteries),

  - Kidneys (renal arteries),

  - Liver, gall bladder and bile ducts (bilary arteries),

  - Lower abdomen and upper legs (iliac or ilio-femoral arteries),

  - Thighs (femoral or "SFA" arteries),

  - Arteries around and above the knee (popliteal arteries), and

  - Below the knee (infra-popliteal arteries).

1 Product market definition

13) The Commission has already been called upon assessing transactions in the field of endovascular devices,  namely  in  the  cases  Johnson  &
    Johnson / Guidant[8] and Abbott / Guidant.[9] Specifically, the Commission analysed the  following  markets  in  the  area  of  endovascular
    devices, namely the markets for (i) stents, (ii) guiding catheters, (iii) steerable guidewires, (iv)  PTA  balloon  catheters,  (v)  embolic
    protection devices.[10] A number of these markets are affected by the proposed Transaction and will be analysed in this decision.

1 Stents

14) PV stents are small expandable metallic tubes designed to treat a narrowing or blockage in a peripheral artery.

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1 Commission's previous practice

15) In previous decisions, the Commission divided endovascular stents into three different product markets, namely in balloon expendable  stents
    ("BX stents"), in self-expandable non-carotid  stents  ("non-carotid  SX  stents")  and  in  self-expandable  carotid  stents  ("carotid  SX
    stents").[11]

16) Several factors led to distinguishing between BX and SX stents. First, the degree of demand side substitutability between the two  kinds  of
    stents is very limited: the use of one or the other is determined by the type of procedure (e.g. BX for renal, SX for carotid) and the  type
    of lesion. Secondly, SX stents are considerably more expensive than BX stents. From the supply side BX and SX stents have different  design,
    they are made of different materials, they use different deployment techniques  and  they  require  different  manufacturing  processes.  In
    addition, the Commission defined a separate market for SX stents for carotid procedures mainly due to the fact that they  undergo  different
    regulatory approval process than other stents and the fact that dedicated stents are used for carotid procedures.[12]

17) The Commission also considered that stents within the BX and non-carotid SX categories could potentially be further segmented  by  size  and
    use, as well as by procedure, because of the high degree of heterogeneity, and the low degree of substitutability.[13]

2 Notifying Party's views

18) The Notifying Party considers that BX stents and SX stents, and potentially SX stents for carotid indications, are  the  narrowest  relevant
    markets in this case and that no further sub-segmentation by procedure or by size (length and diameter) is warranted.  The  Notifying  Party
    explains that stents are typically indicated for more than one type of procedures. Regarding segmentation by size, all manufacturers have  a
    range of various lengths and diameters; can therefore easily switch from one size to another. It also argues that physicians can deploy  two
    stents instead of one for long lesions without any therapeutic downside, and rarely use stents of unusual diameters.

3 Assessment of the Commission

    BX stents vs SX stents

19) The results of the market investigation supported the conclusion in the Commission's precedents, namely that BX stents and SX stents are not
    interchangeable in particular due to differences in terms of flexibility, precision and pressure they  can  tolerate.  BX  stents  are  more
    precise and more suitable for very calcified lesions while SX stents are more flexible, more resistant to deformation and are therefore used
    in more tortuous regions. BX stents and SX stents are used for different types of lesions and usually also in different  locations.  In  the
    parts of the body where physicians can use both types of stents, the length and calcification of the lesion determines the choice  of  using
    either BX stents or SX stents.[14]

    Segmentation of BX stents by procedure

20) The results of the market investigation indicated that BX stents are overall not to be further segmented  by  procedure,  except  for  renal
    procedures which can require specific stent profile and length. Iliac and infra-popliteal procedures are  the  two  other  procedures  which
    often require BX stents; nevertheless, the differences of the BX  stents  used  in  these  cases  mainly  differ  in  terms  of  length  and
    diameter.[15]

    Segmentation of SX stents by procedure

21) SX stents are usually used for iliac, SFA, popliteal and  carotid  procedures.  Most  respondents  indicated  that  SX  stents  for  carotid
    procedures are specifically designed and thus different from other SX stents, in particular in terms of design and to some  extent  delivery
    system and that other stents cannot be used for these  procedures.[16]  As  concerns  SX  stents  for  non-carotid  procedures,  the  market
    investigation provided indications that within the non-carotid procedures there are so-called multipurpose SX stents that can  be  used  for
    multiple procedures. Different parameters such as the flexibility of the stent can however influence the choice  of  a  stent  for  a  given
    procedure.

    Segmentation of stents by size

22) Generally, physicians choose the length of a stent depending on the vessel and lesion to be treated. They therefore avoid using two  shorter
    stents instead of one longer one, as this would increase the risk of the procedure and post-operation complications.[17] Physicians  however
    rarely use these very long stents and often order them separately.[18]

4 Conclusion

23) The Commission therefore considers that in line with the past practice the stents market should be first subdivided into BX  stents  and  SX
    stents. In addition, the SX stents should be broadly subdivided by procedure into SX stents for carotid procedures and SX  stents  for  non-
    carotid procedures. Any further segmentation by procedure or size is not  necessary  for  the  purposes  of  the  present  decision  as  the
    transaction does not give rise to serious doubts as to its compatibility with the internal market in relation to stents markets irrespective
    of the exact product market definition.

2 Endovascular accessories: guidewires, support catheters, PTA balloons

24) Guidewires are thin, flexible wires made out of stainless steel springs surrounding a stiff metal rod, or nitinol. They are often coated  to
    reduce friction as they are passed through vessels (the coatings can be of Teflon, silicon or hydrophilic). Guidewires are used to reach and
    maintain access to the lesion.

25) A support catheter is introduced if a lesion is particularly calcified or stiff and cannot be reached  only  with  a  guidewire.  A  support
    catheter is a stronger, more rigid device, which allows the interventionalist to "push" through the blockage of  the  calcified  lesion.  As
    with guidewires, support catheters are typically coated in a substance that prevents sticking.

26) PTA balloon catheters are inserted to the lesion and are expanded to push the plaque against the wall of the vessel, allowing blood to flow.

27) Medtronic is not active in the supply of guiding catheters for  peripheral  vascular  procedures.  There  is  thus  no  overlap  in  guiding
    catheters. Therefore, guiding catheters will not be discussed further in this decision.

1 Commission's previous practice

28) The Commission has previously defined separate markets for endovascular accessories and in particular for the  following  three  categories:
    guiding catheters, steering guidewires and PTA balloon catheters for endovascular procedures due to the absence of demand-side  and  supply-
    side substitutability between these products. These markets were however not further segmented by dimension or shape due to a  high  supply-
    side substitutability, all major manufacturers offering a broad range of products.[19]

29) The Commission has not previously defined a market for support catheters.

2 Notifying Party's views

30) The Notifying Party submits that endovascular  guidewires,  support  catheters  and  PTA  balloon  catheters  constitute  separate  markets.
    Guidewires come in multiple thicknesses and lengths, support catheters in different diameters and lengths, PTA balloon catheters in a  range
    of lengths, diameters and guidewire compatibility (thickness). The Notifying Party considers, however, that each  category  forms  a  single
    relevant market, regardless of length, diameter and thickness, as there is a high supply-side substitutability.

3 Assessment of the Commission

    Support catheters

31) The results of the market investigation indicated that support catheters are  overall  not  substitutable  with  other  peripheral  vascular
    accessories.[20] Only a few physicians indicate using PTA balloon catheters and  to  a  lower  extent  other  types  of  catheters  (guiding
    catheters, diagnostic catheters) as substitutes to  support  catheters.[21]  Most  physicians  overall  indicated  that  guiding  catheters,
    diagnostic catheters and support catheters present significant differences in terms of tip design and stiffness.[22]

32) From a supply-side perspective the market investigation was inconclusive, as some competitors indicated that they use the same  technologies
    for all of these products, while others consider that the manufacturing processes and associated IP rights are different  and  therefore  do
    not allow for swift switching between the various types of catheters.[23] Within support catheters, there are no specific  difficulties  for
    manufacturers to produce support catheters of different diameters and lengths.[24]

    Guidewires

33) Regarding the absence of substitutable products to guidewires, no element was brought to the  Commission's  attention  that  would  lead  to
    different conclusions from those formulated in the Commission's past decisions.

34) From a supply-side perspective, competitors indicated that the main supply-side challenge  for  switching  from  one  guidewire  to  another
    concerns the coating formulation, but they did not mention specific hurdles regarding the production of different thicknesses.[25]

    PTA balloon catheters

35) The results of the market investigation indicate that no other device is considered as substitutable to PTA balloon catheters  in  terms  of
    the therapeutic indication.[26] Physicians consider that the main features of PTA balloon catheters are the length, diameter,  thickness  of
    compatible guidewire, profile (in French units) and withstand pressure.[27] Prices can  vary  depending  on  these  features,  and  rise  in
    particular in case of high pressure.[28]

36) Overall, PTA balloon catheters compatible with 0.035'' guidewires are the most commonly used by physicians.[29] PTA balloon  catheters  with
    0.014'' and 0.018'' compatibility are used for below the knee procedures and distal lesions.

37) From a supply-side perspective, some competitors indicated that all PTA balloon catheters are produced based on the same  technology,  while
    others consider that the manufacturing processes vary, for example depending on the shaft configuration, and that differences  in  terms  of
    marketing approval depending on the indication can impact the supply-side substitutability (class III for carotid indication, class IIa  for
    other procedures). No manufacturer pointed out specific difficulties to produce PTA balloon catheters of different sizes.[30]

4 Conclusion

38) Therefore, the Commission concludes, in line with its past practice, that guidewires, support catheters and PTA balloons constitute separate
    relevant markets. Any further segmentation by size is not necessary for the purposes of the present decision, as the  transaction  does  not
    give rise to serious doubts as to its compatibility with the internal market in relation to endovascular accessories  markets,  irrespective
    of the exact product market definition.

3 Embolic protection devices (EPDs)

39) EPDs are small umbrella-type devices that are placed beyond the lesion with the aim of trapping any  material  or  debris  dislodged  during
    procedures and carried by circulation (emboli). If an embolus travels to the brain, it can cause stroke.  Embolic  protection  devices  thus
    have a high utilisation rate in carotid interventions.

40) Filter baskets are net-like structures that are placed beyond the lesion to allow for the trapping of plaque without  blocking  blood  flow.
    Filters can come pre-mounted on a PTA balloon catheter or can go "over the guidewire."

41) A proximal occlusion balloon is a balloon deployed upstream of the lesion. Once inflated, it stops  the  blood  flow  to  the  brain  and/or
    kidneys. Any emboli knocked loose from the procedure are prevented from traveling in the bloodstream.

42) A distal occlusion balloon is a balloon deployed downstream of the lesion. Once inflated, it stops the  flow  of  blood  from  entering  the
    treatment area and thus stops any emboli travelling to the brain or kidneys.[31]

1 Commission's previous practice

43) The Commission has found in its previous decisional practice that all EPDs are part of the same market.[32]

2 Notifying Party's views

44) The Notifying Party submits that there are three types of EPDs: filter baskets, proximal occlusion balloons and distal  occlusion  balloons.
    Medtronic predominantly sells proximal occlusion balloons while Covidien exclusively sells filter baskets. The Notifying Party submits  that
    filter baskets and proximal occlusion balloons do not belong to the same product markets.

3 Assessment of the Commission

45) During the market investigation surgeons indicated that they use EPDs to a very large extent for carotid procedures only, although  some  of
    them also use EPDs in other situations for example when there is a complete occlusion and the risk  of  emboli  to  get  released  into  the
    bloodstream.[33] They usually use filter baskets only, or  sometimes  filter  baskets  and  occlusion  balloons,  therefore  confirming  the
    Notifying Party's submission regarding the predominance of filter baskets.[34] This seems to be due to the  fact  that  filter  baskets  are
    easier to use and present the advantage of preserving the blood flow.[35]

46) On the supply-side it seems that filter baskets and occlusion balloons are based on different technology, filter baskets being  the  leading
    technology on the market.[36]

4 Conclusion

47) In any event, for the purpose of the present decision, it is not necessary to conclude whether the EPD market should be  further  subdivided
    into filter baskets, proximal occlusion balloons and distal occlusion balloons, as the Transaction does not give rise to serious  doubts  as
    to its compatibility with the internal market in relation to embolic protection devices markets, irrespective of the  exact  product  market
    definition.

4 Drug coated balloons (DCBs) and drug eluting stents (DES)

48) The Commission has not previously analysed drug coated balloons for peripheral vascular use.[37] Drug coated balloon catheters[38]  function
    in broadly the same manner as PTA balloon catheters, but unlike PTA balloon catheters, DCBs also contain a drug - usually  paclitaxel[39]  -
    and a drug-releasing mechanism. Therefore, besides having a mechanical effect of  pushing  the  plaque  against  the  wall  of  the  vessel,
    paclitaxel acts as an agent preventing the re-narrowing of the vessel by limiting the cells growth thus interrupting the  vessel’s  tendency
    to (re)narrow.

1 Notifying Party's views

49) The Notifying Party submits that DCBs constitute a separate relevant market from other endovascular devices and  PTA  balloon  catheters  in
    particular given that on the demand side DCBs have potentially significant clinical advantages as compared to  PTA  balloon  catheters,  and
    DCBs are sold at a much higher (more than double) price than PTA balloon catheters. In addition, the Notifying Party argues that  there  are
    important manufacturing differences and associated IP linked to the application of drug coating on the balloons, which  impede  any  supply-
    side substitution.

50) However, the Notifying Party considers that there is substitution between DCBs and drug eluting stents (DESs) given that  interventionalists
    would be unlikely to use both in a procedure and an interventionalist minded to use drug-eluting technology  for  a  given  procedure  could
    decide to use a DCB or a DES to achieve clinically equivalent results.

    2 Assessment of the Commission

51) The Commission tested the scope of the relevant market for DCBs and in particular whether DCBs compete with non-coated PTA  balloons  and/or
    DESs. Surgeons having responded to the Commission's market investigation indicated that they would typically use a DCB  either  as  a  first
    line of treatment of different types of above the knee lesions, in particular SFA and popliteal lesions, or in situations  of  a  restenosis
    after previous angioplasty or stenting done before[40].

52) As concerns the substitutability with other PV devices and PTA balloons in particular, the market investigation indicated that DCBs are  not
    substitutable or even comparable to any other peripheral vascular devices in terms of their characteristics, performance, medical  efficacy,
    etc.[41]

53) Similarly, as concerns the substitutability with DESs, the majority of customers explained that DCBs and DESs cannot in principle be used in
    an interchangeable manner for a given patient.[42] DESs would be used only for certain more severe indications or for indications in which a
    DCB cannot be used[43] and in all cases cannot be used in arteries which are subject to bending (for example when  walking).[44]  Generally,
    the market investigation did not confirm the clinical substitution between DCBs and DESs also because DCBs present the main advantage of not
    leaving a foreign element behind contrary to DESs.[45] Therefore, from a clinical point of view, DESs are considered as much  more  invasive
    therapy than DCBs and would typically be used in different situations and never as  a  first  line  of  treatment.  In  addition,  customers
    explained that DCBs and DESs are not comparable in terms of price, DESs  being  more  expensive  than  DCBs,  making  economic  substitution
    unlikely.[46]

54) Similarly, from a supply-side perspective, competitors indicated that DCBs and DESs are not produced based on the same technology,  IP,  and
    manufacturing process[47] and that developing a new device is a costly process which would last approximately 2-3 years.[48]

    3 Conclusion

55) Therefore, considering the characteristics, clinical use and manufacturing processes for DCBs, the Commission concludes for the  purpose  of
    the present decision that DCBs constitute a separate relevant market from other endovascular devices, and from DESs in particular.

5 CTO crossing devices

56) Chronic total occlusion ("CTO") refers to a situation where a vessel is completely blocked. Vessels  suffering  from  highly  calcified  CTO
    cannot usually be crossed using a guidewire or support catheter and are therefore treated with CTO crossing devices.

1 Commission's previous practice

57) The Commission has not analysed the market for CTO crossing devices in the past.

2 Notifying Party's views

58) The Notifying Party submits that there are two types of CTO crossing devices:

 a) recanalization devices, which use high frequency vibrations and micro-dissection (i.e. scissor-like cutting), and

 b) re-entry devices, which cut into the sub-intimal part of the vessel itself (outside the lumen) and thereby go around the lesion and then "re-
    enter" the vessel.

59) The Notifying Party considers that the relevant market should include all CTO crossing devices based on the  fact  that  they  are  used  to
    achieve the same result and the prices are similar.

3 Assessment of the Commission

60) Physicians indicated during the market investigation that CTO crossing devices overall serve the same  purpose  as  guidewires  and  support
    catheters but are usually used when the first line of treatment  fail  (i.e.  for  difficult  lesions,  total  occlusions).[49]  The  market
    investigation revealed that physicians are relatively rarely familiar with both products. One physician explained that re-entry devices  are
    only used where entry through the true vessel lumen is not possible.[50]

61) Medtronic's internal documents indicate that the market contains three segments depending on the severity of lesions namely  catheters  used
    for low severity lesions, recanalisation devices which are better suited for lesion of medium severity, and re-entry devices used for  high-
    severity lesions.[51]

62) From a supply-side perspective, competitors indicated that there is no substitutability between re-entry devices and recanalization devices,
    because of different IPs, different technology and manufacturing processes.[52] Competitors also indicated that there is a significant price
    difference between re-entry devices and recanalization devices, although different estimations of this price difference were given.[53]  The
    existence of a price difference is also supported by Medtronic's internal documents which show that  re-entry  devices  are  typically  more
    expensive than recanalization devices.[54] In addition, competitors indicated that there are significant differences between the development
    and production of CTO crossing devices for larger vessels and smaller vessels that limit  the  supply-side  substitutability.  A  competitor
    explained for example that the profile and size of the artery is impacting the profile of the device and sheath  compatibility,  leading  to
    differences in the design of the device and in the production.[55]

4 Conclusion

63) In any event, for the purpose of the present decision, it is not necessary to conclude whether the market for CTO crossing devices should be
    further subdivided by type of CTO or by vessel indication, as the Transaction does not give rise to serious doubts as to  its  compatibility
    with the internal market in relation to CTO crossing devices, irrespective of the exact product market definition.

2 Geographic market definition

64) The Commission previously considered that the scope of the relevant geographic market for  medical  devices  including  peripheral  vascular
    devices, irrespective of the type of device, are national,[56] despite the fact that the applicable regulatory scheme (the CE mark)  is  EU-
    wide in scope. This is in particular due to:

 a) National reimbursement schemes influencing which products are reimbursed and under which conditions (e.g. based on costs incurred,  on  type
    of condition treated, etc.);

 b) Procurement processes and patterns (e.g. purchasing groups, tenders at hospital level, etc.);

 c) Significant price differences between countries;

 d) Necessity for suppliers to have local sales offices; and

 e) Significant variations of competitors' market shares across the countries.

65) Without contesting the appropriateness of the national market definition, the Notifying Party considers that EEA-wide data may,  in  certain
    circumstances, be more reflective of the supply capabilities of certain competitors.

66) The market investigation did not surface any element which would lead to a different conclusion from  the  previous  Commission's  cases  in
    medical devices and peripheral vascular devices in particular.

67) Therefore, the Commission concludes for the purpose of the present decision that the geographic  markets  in  relation  to  the  various  PV
    devices concerned by this decision are national in scope.

3 Competitive assessment

1 General features of peripheral vascular devices markets

68) Before analysing the overlaps per se the Commission sets out a number of general medical devices market features which have an influence  on
    the market structure.

69) Peripheral vascular devices markets are characterised by a number of features related to the access to the market, including development and
    approval issues, distribution patterns, as well as reimbursement and pricing. These features impact companies' strategy decisions  and  more
    particularly their ability to enter a given product market and their incentive to enter a given geographic market.

1 Research and development

70) Most peripheral vascular devices that are currently on the market are technologically mature and do not attract significant R&D  spend.  R&D
    spend is typically used to maintain competitiveness by process innovation (e.g. range expansion) or lowering the cost of the goods.

71) The research in the peripheral vascular devices area focuses on products which can  appreciably  reduce  restenosis  rates  beyond  existing
    levels (e.g. DCBs) and those which  reduce  invasiveness  (e.g.  bio-absorbable  stents).[57]  R&D  spend  mainly  comprises  investment  in
    technological developments and clinical studies.

72) Product development follows a number of phases, beginning with a concept phase, and a design development  phase  which  often  involves  Key
    Opinion Leaders for completing and freezing the product design. Afterwards manufacturers typically complete design verification,  regulatory
    submissions, and prepare for clinical trials and process validation.  Animal and human tests would typically take place during this phase if
    required. Products under development are then typically two years away from  launch.  With  the  first  clinical  trials  ongoing  and  data
    available, pipeline products begin to be competitively significant. Manufacturers usually then validate the manufacturing process,  evaluate
    the clinical evidence and prepare the commercial release.

73) The recent development of DCBs typically took 6-7 years and required several hundreds of million euros. By way of example, Medtronic decided
    to develop a DCB in […], started the development in […], and sold its first DCB in the EU in […]. It spent overall USD […], million  on  the
    research, development, manufacture, license, and sale of its DCB product, including for the development of the  PTA  balloon.  Likewise,  CV
    Ingenuity Corp. ("CVI") (a company ultimately acquired by Covidien) and Covidien filed its first DCB patent in […], began the first in-human-
    trial in […], and is expected to sell its first DCB early […]. Covidien expects to have spent around USD […] million  on  R&D  and  clinical
    trial costs from CVI's first investments until […]. Bard has spent around USD 325 million on its DCB, Lutonix.[58]

74) The quality and amount of clinical data obtained via trials are key supporting elements for the promotion of  new  products,  as  physicians
    strongly base their decision-making on these data. Clinical trials need to be run with a sufficient number of patients to  be  reliable  and
    therefore constitute a significant financial investment in the development cost of a new product. By way of  example,  Covidien  expects  to
    spend more than half of its total development costs for clinical trials.

2 Approval process

75) Peripheral vascular devices, like all other medical devices, must be approved under Union-wide legislation before they may be  marketed  for
    sale in Europe (i.e. obtaining of the CE mark). For the purpose of the conformity assessment procedures, the EU groups the devices into four
    product classes (class I, class IIa, class IIb, class III) depending on their impact on the  human  body.  This  classification  takes  into
    account the potential risks associated with the technical design and manufacture of the devices. Most peripheral vascular  devices  analysed
    in this decision are class IIa or IIb, except SX stents for carotid procedures (class III) which therefore require  prior  authorisation  in
    addition to the notification requirements and risk of inspection common with the class II conformity procedures.

3 Reimbursement and pricing

76) In addition to obtaining the CE mark, a medical device supplier must secure the reimbursement of  the  device  in  all  countries  where  it
    intends to market the product. To obtain the reimbursement, the market investigation  indicated  that  robust  clinical  data  needs  to  be
    presented, in particular in some countries such as France.[59]

4 Distribution

77) Manufacturers can either sell directly, via distributors (exclusive or not), via agents or via a hybrid model combining different  types  of
    distribution channels. The distribution in these markets depends on the size and expected potential of the geographic markets,  availability
    of external expertise, as well as on the product characteristics, in particular the product maturity and need to train physicians.

    5 Contract allocation process

78) PV devices are mainly hospital products for which hospitals in the EEA typically organize tenders. There  is  an  increasing  trend  towards
    combining purchases of different hospitals through buying groups, practice largely  exercised  in  certain  countries  such  as  Germany  or
    Austria. These buying groups may either bilaterally negotiate or organise tenders on behalf of a number of hospitals, which consequently are
    bound by the arrangement of the buyer group with the manufacturer. Tenders are in principle organised for a  specific  product  or  type  of
    products. Even in the case of multiproduct tenders, these are usually structured on the basis of lots, in order to ensure  that  competition
    takes place in relation to all individual products sold.

79) Both medical staff and personnel in charge of purchasing are usually involved in the selection of the medical  devices.[60]  The  physicians
    using specific devices are usually consulted and can express strong preference in particular for new devices, where clinical data is  a  key
    selection criterion, or for devices, which require some training/habit of use. Mirroring this, manufacturers' and distributors' sales forces
    are also specialised on certain types of products (e.g. on peripheral vascular or electrosurgical devices),  which  enable  easier  contact,
    marketing and training.

2 Competitive landscape of various peripheral vascular devices markets

80) The competitive landscape in the various peripheral vascular devices markets depends to a certain  degree  on  their  maturity,  going  from
    mature (stents) to early stage (drug-coated balloons). Generally, the main players in the  peripheral  vascular  devices  area  are  Abbott,
    Boston Scientific, J&J/Cordis, Bard, Cook Medical, Medtronic, Covidien, and Gore. They are generally active in several product  areas  while
    some of them cover a whole range of devices used in the treatment of peripheral vascular diseases, as  can  be  seen  from  Table  1  below.
    Smaller, more specialised, competitors can have a sizeable presence, in particular in the less commoditised markets.

Table 1 - Product range by supplier[61]

|Competitor              |BX stents     |SX stents       |SX stents       |PTA Balloon     |EPDs            |CTO Crossing    |
|                        |              |carotid         |non-carotid     |Catheters       |                |Device          |
|Denmark                 |1.476         |[0-5]%          |[20-30]%        |[20-30]%        |[20-30]%        |[20-30]%        |
|Estonia                 |0.161         |[10-20]%        |[40-50]%        |[50-60]%        |[40-50]%        |N/A             |
|Germany                 |24.818        |[5-10-]%        |[10-20]%        |[20-30]%        |[20-30]%        |[20-30]%        |
|Italy                   |10.074        |[0-5]%          |[10-20]%        |[20-30]%        |[20-30]%        |[20-30]%        |
|Latvia                  |0.246         |[0-5]%          |[20-30]%        |[30-40]%        |N/A             |N/A             |
|Lithuania               |0.362         |[10-20]%        |[5-10]%         |[20-30]%        |[20-30]%        |[20-30]%        |
|Poland                  |3.847         |[10-20]%        |[10-20]%        |[20-30]%        |[30-40]%        |[20-30]%        |
|Slovenia                |0.260         |[20-30]%        |[5-10]%         |[30-40]%        |[40-50]%        |N/A             |
|Spain                   |6.273         |[5-10]%         |[10-20]%        |[20-30]%        |[20-30]%        |[20-30]%        |
|Sweden                  |2.212         |[5-10]%         |[30-40]%        |[30-40]%        |[30-40]%        |[30-40]%        |
|United Kingdom          |6.530         |[0-5]%          |[20-30]%        |[20-30]%        |[20-30]%        |[20-30]%        |
|EU Total              |116.618       |[5-10]%         |[10-20]%        |[10-20]%        |N/A             |N/A             |
|Greece                |0.281         |[0-5]%          |[20-30]%        |[20-30]%        |[40-50]%        |[70-80]%        |
|Italy                 |2.519         |[10-20]%        |[10-20]%        |[30-40]%        |[30-40]%        |[30-40]%        |
|Latvia                |0.027         |[10-20]%        |[10-20]%        |[20-30]%        |N/A             |N/A             |
|Poland                |0.427         |[40-50]%        |[10-20]%        |[50-60]%        |[50-60]%        |[40-50]%        |
|Romania               |0.125         |[10-20]%        |[10-20]%        |[30-40]%        |[30-40]%        |[20-30]%        |
|Slovenia              |0.180         |[10-20]%        |[10-20]%        |[20-30]%        |[20-30]%        |N/A             |
|Spain                 |0.697         |[0-5]%          |[10-20]%        |[20-30]%        |[30-40]%        |[40-50]%        |
|EU Total              |16.447        |[5-10]%         |[5-10]%        |[10-20]%         |N/A              |N/A              |
|France                |0.466         |[0-5]%          |[20-30]%       |[20-30]%         |[10-20]%         |[10-20]%         |
|Italy                 |6.199         |[10-20]%        |[10-20]%       |[30-40]%         |[20-30]%         |[20-30]%         |
|Latvia                |0.052         |[5-10]%         |[50-60]%       |[60-70]%         |[60-70]%         |[70-80]%         |
|Poland                |1.342         |[10-20]%        |[10-20]%       |[20-30]%         |[10-20]%         |[20-30]%         |
|Slovenia              |0.168         |[10-20]%        |[20-30]%       |[40-50]%         |[30-40]%         |N/A              |
|Sweden                |0.129         |[5-10]%         |[20-30]%       |[30-40]%         |[30-40]%         |[20-30]%         |
|United Kingdom        |0.400         |[5-10]%         |[20-30]%       |[30-40]%         |[30-40]%         |[30-40]%         |
|EU Total                                                             |21.882                      |
|Austria                                                              |1.100                       |
|Belgium                                                              |0.800                       |
|Bulgaria                                                             |0.050                       |
|Croatia                                                              |0.003                       |
|Cyprus                                                               |0.009                       |
|Czech Republic                                                       |0.240                       |
|Denmark                                                              |0.240                       |
|Estonia                                                              |0.052                       |
|Finland                                                              |0.240                       |
|France                                                               |0.720                       |
|Germany                                                              |16.500                      |
|Greece                                                               |0.070                       |
|Hungary                                                              |0.070                       |
|Ireland                                                              |0.150                       |
|Italy                                                                |1.200                       |
|Latvia                                                               |0.080                       |
|Lithuania                                                            |0.118                       |
|Luxembourg                                                           |0.305                       |
|Malta                                                                |0.004                       |
|Netherlands                                                          |0.320                       |
|Poland                                                               |0.120                       |
|Portugal                                                             |0.050                       |
|Romania                                                              |0.003                       |
|Slovakia                                                             |0.350                       |
|Slovenia                                                             |0.034                       |
|Spain                                                                |0.500                       |
|Sweden                                                               |0.500                       |
|United Kingdom                                                       |1.000                       |
|EU Total                                                             |24.826                      |
|Norway                                                               |0.197                       |

           Source: Form CO

81) In this context, the market investigation confirmed that DCBs are a very promising and growing therapy. It is indeed becoming the first line
    of treatment for the peripheral vascular diseases where it is proven to be particularly effective, such as SFA and popliteal procedures.

82) The Commission will first describe the existing and pipeline DCBs in the EEA in Section IV.2.3.5.c  before  assessing  the  effects  of  the
    Transaction on the market for DCBs in Section IV.2.3.5.d.

    1 Description of existing and pipeline DCBs

83) Given the promising nature of the therapy and the ensuing market growth many start-up and major medical device companies  have  invested  in
    the development of DCBs.

84) Currently, in Europe, 10 companies have a DCB with CE mark, namely Medtronic (described in Section IV.2.3.6.c.i), Aachen  Resonance,  Atrium
    Medical, Bard, Biotronik, Boston Scientific, Cardionovum, Cook Medical, Eurocor and iVascular (described in Section IV.2.3.6.c.ii).

85) Covidien, on the other hand, only has a pipeline DCB called Stellarex which is described in Section IV.2.3.6.c.iii.

1 Medtronic's existing DCBs

86) Medtronic was the first medical device supplier to launch a drug coated balloon catheter  in  Europe  in  early  2009.  Medtronic  currently
    markets two types of DCBs (i) a product called IN.PACT Admiral and (ii) a product called IN.PACT Pacific. Both DCB  products  use  the  drug
    paclitaxel and are offered in a range of diameters (4.0 – 7.0mm) and four lengths (40, 60, 80 and 120mm). Medtronic's DCBs are indicated for
    above the knee indications (SFA and popliteal procedures).

87) The only difference between the two Medtronic's DCBs is that one is compatible with 0.035'' guidewires while the  other  one  is  compatible
    with 0.018" guidewires.

2 Other existing DCBs on the market

88) Table 8 below lists all manufacturers which currently market a DCB in the EEA and highlights the main characteristics of their device:

    Table 8 - Other existing DCBs in the EEA markets

|Supplier                 |Product            |Launch Date (historic  |Drug Used               |Excipient / Polymer            |
|                         |                   |or expected)           |                        |                               |
|Aachen Resonance         |Elutax             |(At least 2012)        |Paclitaxel              |None                           |
|Atrium Medical           |Clearway           |2007                   |Various therapeutic and |Unknown – it is an infusion    |
|                         |                   |                       |diagnostic agents       |balloon                        |
|Bard                     |Lutonix            |2011 or later          |Paclitaxel              |Polysorbate + Sorbitol         |
|Biotronik                |Passeo-18          |2014                   |Paclitaxel              |BTHC-Butyryl-tri-hexyl Citrate |
|Boston Scientific        |Ranger             |2014 (historic)        |Paclitaxel              |Citrate Ester                  |
|Cardionovum              |Legflow            |2012                   |Paclitaxel              |Shellolic Acid                 |
|Cook Medical             |Advance 18 PTX     |2012                   |Paclitaxel              |None                           |
|Eurocor                  |Biosensors Range   |2013                   |Paclitaxel              |Unknown                        |
|                         |Freeway            |2010                   |                        |Shellac                        |
|iVascular                |Luminor            |2014 (historic)        |Paclitaxel              |Unknown                        |

      Source: Form CO

89) As can be seen from Table 8 above, most if not all DCBs available on the market in the EEA use the drug paclitaxel and different  excipients
    / polymers.

90) According to the Notifying Party, at least eight players offer DCBs for above the knee indications  (Bard,  Aachen  Resonance,  Cardionovum,
    Cook Medical, Eurocor, Biotronik, iVascular and Boston Scientific), six of which also offer DCBs  for  below  the  knee  indications  (Bard,
    Aachen Resonance, Cardionovum, Eurocor, iVascular and Boston Scientific).

91) The success rate on the market of these various DCBs will be assessed in Section IV.2.3.6.d.iii below.

3 Covidien's pipeline DCB - Stellarex

92) Covidien does not currently market a DCB in the EEA or elsewhere but it has a product in development, called  Stellarex.  Covidien  acquired
    the drug eluting balloon technology through the acquisition of CV Ingenuity at the beginning of 2013.[91] CV Ingenuity filed its  first  DCB
    patent in June 2008 and commenced the first-in-human trial in 2011.[92]

93) Covidien began the regulatory process to obtain CE Mark for above-the-knee indications in the EU in  early  March  2013  and  completion  is
    anticipated in late 2014 or early 2015. Covidien aims to launch the above-the-knee Stellarex with an indication for use in SFA and popliteal
    arteries in late 2014 or early 2015 in Europe.

94) Covidien is also developing Stellarex for use in below the knee procedures, but this project is not yet as developed as the one  for  above-
    the-knee indication. In Europe, Covidien has not submitted an application for CE Mark for below the knee indications, and it does not expect
    to submit it before […]. It is therefore unlikely that the product could be launched before […].

    2 Assessment of the Commission

1 Relevant metrics for comparing the various DCBs

95) To assess the competitive constraint of various devices on the market as well as  the  future  constraint  of  those  in  the  pipeline  the
    Commission endeavoured to compare the various DCBs. In this context, the Notifying Party put forward various metrics  while  the  Commission
    also considered other relevant indicators.

1 TLR rate, patency rate, clinical data and other metrics

96) The Notifying Party compares  its  product  to  the  ones  of  its  competitors'  and  to  Stellarex  by  referring  to  the  target  lesion
    revascularisation rate ("TLR rate"), i.e. a measure of how often, after 12 or 24 months, a new surgery/intervention is required as a  result
    of restenosis or re-narrowing of the vessel.

97) Based on the results of the market investigation, it seems that the relevance of the TLR rate as a comparison parameter  is  limited  for  a
    number of reasons. First, the comparative value of the TLR rate may be limited as the  available  rates  do  not  derive  from  head-to-head
    clinical trials but rather from independent trials based on different samples of patients.  The  Commission  understands  that  head-to-head
    trials for DCBs do not exist yet.

98) Second, the market investigation provided indications that the TLR rate is not the one single factor distinguishing the DCBs from each other
    and allowing concluding on the clinical efficacy of the various devices. Indeed, customers take into  account  various  data,  such  as  the
    technical characteristics of the product (e.g. DCB's pressure, flexibility and stiffness), availability and  robustness  of  clinical  data,
    etc.

99) The "Primary Patency Rate" (PPR) is a measure of how often a vessel remains "open", which itself is determined by an ultrasound machine. For
    example, if the ultrasound reading is that a vessel is still 50% "open" 12 or 24 month after the surgery/intervention, then it will  include
    that result as a positive metric when measuring effectiveness of the DCB.

100) As concerns the clinical data, the market investigation provided indications that this is one of the most important criteria (both in  terms
    of the results and the amount of the data) taken into account by surgeons when selecting which device to implant.[93] Similarly, competitors
    confirmed that the strength of clinical data is an important parameter of competition in this space allowing manufacturers to  differentiate
    themselves in the field of drug coated balloons.[94]

101) Finally, the market investigation highlighted that other factors such as the overall track  record  of  a  company,  ease  of  use  and  the
    availability of the reimbursement are also relevant for surgeons to select a DCB. While the market is still relatively new and the  clinical
    efficacy of the various devices has not yet been fully tested and proven, the surgeons during the market investigation indicated that  there
    are two elements which may play a role in the efficacy of a DCB, namely the excipient which has  an  influence  on  the  coating  durability
    during the implantation and the concentration or dosage of the drug needed.[95]

2 Market shares, Commission's market investigation and Covidien's internal documents

102) The Commission also considered the rate of success of the existing DCB suppliers as reflected by their sales in the various  EEA  countries.
    The Commission further took into account the views of the respondents to the Commission's market investigation including key opinion leaders
    about the other existing and pipeline DCBs as well as Parties' internal documents comparing their devices.

103) The Notifying Party argues that there are 9 other suppliers of DCBs active in  Europe  with  CE  mark  and  which  took  market  share  from
    Medtronic, such as Aachen Resonance, Atrium Medical, Bard, Biotronik, Boston Scientific, Cardionovum, Cook Medical, Eurocor or iVascular.

2 Medtronic's DCB: current leader in the EEA

104) Based on the information provided by the Notifying Party, and the results of the market investigation Medtronic is a clear market leader  in
    most EEA countries in terms of market share.[96] Indeed, in 17 EEA countries it estimates that it has more than 50% market share,  while  in
    further 7 countries its market shares are above 30%. Medtronic's presence is significant in the eight EEA countries which represent close to
    90% of the total sales of DCBs in the EEA,[97] with market shares ranging between 46% and 68%. In the largest EEA country for DCBs, Germany,
    Medtronic is by far the biggest and most significant player.

105) Table 9 below sets out the market shares of Medtronic in 2013 with its DCB in the EU and the various EEA countries:

      Table 9 - Market shares Medtronic DCB

|EU / EEA country                                    |Medtronic's DCB Market  share              |
|EU total                                            |[60-70]%                                   |
|Croatia                                             |[90-100]%                                  |
|Cyprus                                              |[90-100]%                                  |
|Malta                                               |[90-100]%                                  |
|Ireland                                             |[90-100]%                                  |
|Romania                                             |[70-80]%                                   |
|Luxembourg                                          |[70-80]%                                   |
|Finland                                             |[70-80]%                                   |
|Germany                                             |[60-70]%                                   |
|The Netherlands                                     |[60-70]%                                   |
|Sweden                                              |[60-70]%                                   |
|Austria                                             |[60-70]%                                   |
|Denmark                                             |[50-60]%                                   |
|Czech Republic                                      |[50-60]%                                   |
|Poland                                              |[50-60]%                                   |
|Spain                                               |[50-60]%                                   |
|Slovenia                                            |[50-60]%                                   |
|Norway                                              |[50-60]%                                   |
|Italy                                               |[40-50]%                                   |
|France                                              |[40-50]%                                   |
|Belgium                                             |[40-50]%                                   |
|United Kingdom                                      |[40-50]%                                   |
|Greece                                              |[40-50]%                                   |
|Portugal                                            |[40-50]%                                   |
|Hungary                                             |[30-40]%                                   |
|Bulgaria                                            |[20-30]%                                   |
|Slovakia                                            |[20-30]%                                   |
|Lithuania                                           |[10-20]%                                   |
|Latvia                                              |[0-5]%                                     |

           Source: Annex III.6 to the Form CO

106) Medtronic's high market share can partially be explained by historical reasons and namely the fact that Medtronic was  the  first  mover  in
    the market and currently has the strongest clinical data.

107) Respondents to the Commission's market investigation pointed to the strong position of Medtronic on the market  for  DCBs.[98]  Indeed,  the
    majority of respondents either use only Medtronic's DCB product or sometimes also another device, most often Bard's  DCB  Lutonix.  DCBs  of
    other competitors are mentioned only rarely.[99] The majority of customers also indicated that they would use Medtronic as a  first  choice,
    only a few respondents mentioned Bard as the first choice, while the rest of the suppliers such as iVascular, Boston  Scientific,  Biotronik
    and Eurocor are barely mentioned.[100]

108) Based on their experience and available clinical information, when assessing advantages  and  disadvantages,  overall  appreciation  on  the
    market positioning, clinical efficacy, strength of clinical data, etc., of various existing DCBs, respondents  to  the  Commission's  market
    investigation indicated that Medtronic's DCB is always comparable or better than the other DCBs.[101]

109) When comparing Medtronic's DCBs with those of its competitors, respondents to the Commission's market investigation noted  that  Bard's  DCB
    would currently be the most similar alternative/closest competitor of Medtronic in terms of product  characteristics  and  price.[102]  When
    looking at clinical data, such as TLR rate and PPR, it appears that Medtronic's clinical data are better than those of Bard.[103]  Medtronic
    indicates that its DCB have a TLR of 2.4% and a PPR of 89.8% respectively, while Bard's DCB have TLR of 13.3% and a  PPR  of  73.5%[104].  A
    further analysis of Bard's DCB is conducted in Section IV.2.3.6.d.iii.1 below.

110) In the light of the above, it can be concluded that Medtronic currently appears to have a strong position on the market  for  DCBs  in  most
    EEA countries.

3 Other existing DCBs

111) As indicated above, a number of medical device companies market DCBs in the EEA. However, most of these only have a minimal presence and  do
    not seem to be gaining traction, although a number of them entered the market several years ago (e.g. Atrium Medical  in  2007,  Eurocor  in
    2010, Bard in 2011).

112) Based on the results of the market investigation, except for Medtronic, only the devices of Bard, Biotronik and  Eurocor  have  currently  a
    sizeable presence in the market. Therefore, the devices of other competitors having a market share  at  European  level  below  1%  are  not
    analysed in detail in this decision.

1 Bard's Lutonix

113) According to the Notifying Party, Bard's estimated market shares in the EU and the various EEA countries are as follows[105]:

Table 10 - Bard's market shares EEA

|EU/ EEA country                                       |Bard's DCB Market share                           |
|EU                                                    |[10-20]%                                          |
|Hungary                                               |[60-70]%                                          |
|France                                                |[40-50]%                                          |
|Norway                                                |[30-40]%                                          |
|Estonia                                               |[20-30]%                                          |
|Latvia                                                |[20-30]%                                          |
|Greece                                                |[20-30]%                                          |
|Lithuania                                             |[20-30]%                                          |
|Belgium                                               |[20-30]%                                          |
|UK                                                    |[20-30]%                                          |
|Portugal                                              |[20-30]%                                          |
|Denmark                                               |[20-30]%                                          |
|Spain                                                 |[10-20]%                                          |
|Italy                                                 |[10-20]%                                          |
|Germany                                               |[10-20]%                                          |
|Poland                                                |[10-20]%                                          |
|Sweden                                                |[10-20]%                                          |
|The Netherlands                                       |[10-20]%                                          |
|Austria                                               |[10-20]%                                          |
|Czech Republic, Finland, Ireland, Luxembourg, Slovakia|<10%                                              |

      Source: Annex III.6 to the Form CO

114) Medtronic argues that Bard is the closest competitor to its existing DCBs, primarily considering that it is the only other  competitor  with
    comparable clinical data to Medtronic, having realised the IDE testing on 476 patients in randomised control trials for safety and efficacy.

115) This was confirmed during the market investigation pursuant to which Bard appears to be the closest  competitor  of  Medtronic  on  the  DCB
    market so far.[106] Respondents to the Commission's market investigation consider that, while  Bard's  clinical  data  is  not  as  good  as
    Medtronic’s data, its data is overall sufficiently good.[107] Bard itself considers  that  it  has  a  good  product  with  strong  clinical
    evidence. In its view, its advantages are that it has a good brand image, good relationships with surgeons and strong clinical data that led
    to FDA clearance. However, Bard considers as a disadvantage that it has higher prices compared to its competitors.[108]

116) In its internal documents, Covidien treats Bard as a competitor with a sizeable presence on the DCB market. According  to  Covidien,  Bard's
    competitive strength on the DCB market is the […] compared to Medtronic's DCB. However, according to Covidien, Bard's product seems to  have
    a […]. In addition it has some issues linked to the implantation, namely the fact that its balloon platform is prone to twist.[109] This was
    also voiced during the market investigation with one surgeon pointing  to  the  bad  navigability  and  crossing  of  Bard's  DCB.[110]  The
    Commission notes that in terms of clinical data, Bard and Medtronic have undergone similar types of clinical trials and of  all  competitors
    active on the market, have the most results available. In addition,  Bard's  DCB  currently  appears  as  the  second  best  alternative  to
    Medtronic's DCB.[111] However, compared to Medtronic, Bard only managed to achieve a bigger presence in France,  Hungary,  Norway,  Estonia,
    Latvia and Greece which represent a small part of the EEA market for DCBs.[112] Its market share in the other EEA  countries,  including  in
    the countries where DCBs are more widely used such as in Germany, Bard does not appear to have any supremacy.

2 Eurocor's Biosensors Range and Freeway

117) According to the Notifying Party, Eurocor's estimated market shares in the EU and the various EEA countries are as follows[113]:

    Table 11 - Eurocor's market shares EEA

|EU / EEA country                                      |Eurocor's DCB Market share                 |
|EU total                                              |[5-10]%                                    |
|Estonia                                               |[40-50]%                                   |
|Latvia                                                |[40-50]%                                   |
|Lithuania                                             |[30-40]%                                   |
|Poland                                                |[20-30]%                                   |
|The U.K                                               |[20-30]%                                   |
|The Czech Republic                                    |[20-30]%                                   |
|Portugal                                              |[20-30]%                                   |
|Greece                                                |[10-20]%                                   |
|Slovakia                                              |[10-20]%                                   |
|Italy                                                 |[10-20]%                                   |
|Spain                                                 |[10-20]%                                   |
|Belgium                                               |[10-20]%                                   |
|Netherlands                                           |[10-20]%                                   |
|Austria                                               |[10-20]%                                   |
|Germany, Denmark, Finland, Ireland, Sweden            |<10%                                       |

      Source: Annex III.6 to the Form CO

118) Medtronic argues that Eurocor is its closest competitor based on TLR rate (2.4% for Medtronic vs 3.5% for  Eurocor's  Freeway,  launched  in
    2010). In addition, Medtronic argues that Eurocor is particularly price competitive exerting strong pressure on Medtronic  which  translated
    in Eurocor taking share away from Medtronic in a number of EEA countries.

119) Respondents to the Commission's market investigation have not named Eurocor as a  close  competitor  to  Medtronic  in  the  DCB  area.[114]
    Contrary to Medtronic, Eurocor is never mentioned as market leader by customers[115] and it is only rarely mentioned as a first  choice  for
    DCBs.[116] Respondents mentioned that while Eurocor's product has a good drug transfer and is cheaper, it uses an  old  technology,  it  has
    little or no clinical data proving safety and efficacy and may have issues with reimbursement in some countries.[117] Eurocor is also  given
    as a typical example of a company which may not have the financial strength to push its device through all the necessary trials[118] and two
    respondents consider that Eurocor's DCB would not be effective at all.[119] Eurocor itself considers that the advantages of its DCB are  its
    brand and the fact that it is easy to use while the disadvantages would be the limited availability and that  it  does  not  have  dedicated
    sales force for its DCBs.[120]

120) In Covidien's internal documents, Eurocor is not always considered.[121] Covidien also points to the lack of  clinical  data  for  Eurocor's
    product.[122] It also requires 50% higher dose density for a similar uptake, and has  a  low  crystallinity  level  which  may  hamper  drug
    residency and it lacks clinical data.[123] The only competitive strength identified by Covidien of the Eurocor product is the lower price in
    some EU markets (particularly the United Kingdom).

121) The Commission notes that, contrary to the Notifying Party's claims, Eurocor does not appear as close an alternative to Medtronic's  DCB  as
    Bard. Indeed, if the TLR rate was determinant for the success of a DCB as claimed by  Medtronic,  Eurocor  should  have  become  the  second
    biggest competitor in the market after Medtronic. However, the market share data and the return from the market investigation do not confirm
    that Eurocor's device has had such success. Similarly, the fact that Eurocor is price competitive does not seem to translate into  a  strong
    market presence. This is in line with the finding that price is not the key factor in the choice of DCBs. In this context,  in  response  to
    the Commission's market investigation, only a handful of customers named price as the most important factor which  they  take  into  account
    when choosing a specific drug coated balloon with the majority of customers indicating that price is the second or even third or fourth most
    important factor in their choice.[124]

3 Biotronik's Passeo 18

122) According to the Notifying Party, Biotronik's estimated market share in the EU and the various EEA countries are as follows[125]:

           Table 12 - Biotronik's market shares EEA

|EU / EEA country                                |Biotronik's DCB Market share                 |
|EU                                              |[5-10]%                                      |
|Czech Republic                                  |[20-30]%                                     |
|Italy                                           |[10-20]%                                     |
|Latvia                                          |[10-20]%                                     |
|Estonia                                         |[10-20]%                                     |
|Lithuania                                       |[10-20]%                                     |
|Belgium                                         |[10-20]%                                     |
|Luxembourg                                      |[10-20]%                                     |
|UK                                              |[10-20]%                                     |
|Norway                                          |[10-20]%                                     |
|Austria, Denmark, Finland, Germany, Greece,     |<10%                                         |
|Ireland, Netherlands, Poland, Portugal, Spain,  |                                             |
|Sweden                                          |                                             |

           Source: Annex III.6 to the Form CO

123) Medtronic argues that Biotronik established a significant market presence on the DCB market in the EEA, leveraging its brand and  experience
    in coronary devices.

124) Respondents to the Commission's market investigation did not name  Biotronik  as  the  closest  competitor  to  Medtronic  in  the  area  of
    DCBs.[126] Respondents considered that Biotronik's DCB is a new device and is cheaper compared to Medtronic and Bard, however it has a  very
    small clinical data set and no strong data proving safety and efficacy.[127]

125) As concerns Medtronic's argument that Biotronik could leverage  its  success  in  coronary  space  in  to  peripheral  vascular  space,  the
    Commission considers this as unlikely given that the  entry  points  in  the  hospital  are  not  the  same  and  as  explained  in  Section
    IV.2.3.6.d.iv, the evidence shows that success (or lack of it) in one area does not guarantee success in another area.

    4 Other DCBs having a CE mark

126) As for the remaining DCB products on the market, the market investigation further pointed out that  these  other  DCBs  are  relatively  new
    products which lack sufficient data to prove reliability and efficacy. Some of them are even sometimes considered by  some  doctors  as  not
    effective or working just as well as uncoated balloons. Indeed the remaining six of the  existing  suppliers  have  a  minimal  presence  in
    Europe[128]:

 a) Aachen Resonance has merely a [0-5]% EU wide market share and its highest (and only) share of [40-50]% would be achieved in Slovakia,

 b) Cardionovum achieved a [0-5]% EU wide market share and its highest (and only) share of [10-20]% was achieved in Slovakia,

 c) Cook Medical with a [0-5]% EU wide market share and highest share in Bulgaria of [10-20]% and only other presence in France with [0-5]%,

 d) Boston Scientific with a [0-5]% EU wide market share and highest share of [30-40]% in Bulgaria and only other presence in Romania with  [20-
    30]%[129],

 e) Atrium Medical and iVascular which together with others achieved a EU-wide share of [0-5]%. The countries where these suppliers have  higher
    market shares are typically those where clinical trials for these devices are conducted, accounted in the market share data as sales.

127) Medtronic in its internal documents only rarely refers to the devices of these  companies.[130]  The  market  investigation  confirmed  that
    these devices have currently very little traction in Europe possibly because of the doubts associated with their clinical efficacy.

128) It follows that these DCBs have a very limited presence on the market at this stage and  it  is  unclear  whether  any  of  them  will  gain
    traction.

5 Conclusion

129) In light of all available evidence, the Commission considers that  Medtronic  is  a  clear  market  leader  in  the  area  of  DCBs.  Albeit
    substantially smaller, Bard is so far the closest competitor to Medtronic. The other existing DCB manufacturers with a device  currently  on
    the market have an even more limited presence and often lack the clinical data necessary to gain adhesion  of  the  surgeons.  It  therefore
    appears that the existing competitors would not be in a position to exert sufficient competitive pressure on the merged entity  on  the  DCB
    market post-Transaction.

4 Covidien's Stellarex: likely a strong contender on the DCB market

130) Medtronic considers that Covidien’s pipeline product Stellarex is more likely to compete with other DCBs  (e.g.  Biotronik’s  product)  than
    with Medtronic's DCB. This argument is based on the fact that, according to Medtronic, Stellarex's TLR rate of 12.1% is closer  to  that  of
    Biotronik (15.4%) than to the one of Medtronic 2.4%. Medtronic also claims that Covidien does not yet have the results of any  rigorous  IDE
    Testing but instead has simply had a "first in human" study of 50-80 patients and only for safety (not efficacy or equivalence with marketed
    products). Accordingly, the Notifying Party submits that Stellarex is not a close competitor to Medtronic's DCBs. In addition, Covidien does
    not benefit from any track record of success in coronary DCBs and that it does not expect Stellarex to be marketed at premium  prices  (i.e.
    Stellarex will not be marketed at prices comparable to Medtronic’s IN.Pact products).[131]

131) The market investigation portrayed a somewhat different picture. First, according to Covidien, Stellarex has a  progressive  design  and  is
    part of the next generation manufacturing process for DCBs.[132] Covidien considers that crystalline coating may facilitate  persistence  of
    drug with lower dosage than most competitors.[133] It therefore expects a higher drug uptake  at  lower  dosage  than  its  competitors  (in
    particular Medtronic and Bard). It also considers that Stellarex presents a better coating durability during the balloon's  implantation  to
    treatment site of Stellarex than Medtronic's DCB and comparable to Bard's product.[134] Surgeons participating in Covidien's  trials  seemed
    to be particularly enthusiastic about this specific coating design, pointing to the novelty and the ensuing advantage for Stellarex compared
    to competing devices.[135]

132) Covidien most often compares its Stellarex  product  with  Medtronic's  DCBs.  Covidien  recognises  the  competitive  strength  of  one  of
    Medtronics' DCBs, in particular due to the balloon platform, the fact that it is the established market leader and that it is the leader  in
    clinical enrollment.[136] However, when compared to Stellarex, Covidien considers that Medtronic uses 50% higher dose density than Stellarex
    with similar uptake and that it loses significantly more coating in transit to lesion site than Stellarex.

133) Therefore, in terms of clinical impact, Covidien considers that Stellarex has a number of benefits such as a low rate of drug loss prior  to
    deployment, its crystalline structure which improves duration, a 100% clinical success meaning that all procedures  were  performed  without
    the occurrence of a material adverse effect and a high patency in early outcomes, namely a 12 month PPR of 87%[137] compared to  Medtronic's
    12 month PPR of 83.7%.[138] [Confidential statement regarding Covidien’s investments in clinical trials] as Medtronic's and Bard's which are
    outpacing Covidien in trials.[139] However, Covidien has upscaled their trial series so that at least [number of]  patients will be  treated
    with the Stellarex[140]. Covidien expects to spend additional USD […] million  on  R&D  and  clinical  trials  until  2019.[141]  The  total
    investment in Stellarex[142] will therefore be comparable with Medtronic's, which spent about USD […] million.[143] Covidien also  developed
    a marketing strategy focusing on activities that will enable them to raise awareness of Stellarex' advantages despite the smaller amount  of
    data currently available.[144]

134) During the market investigation several key  opinion  leaders[145]  indicated  that  Covidien’s  product  cannot  really  be  compared  with
    competitors’ products and in particular Medtronic’s at this stage, as there are no sufficient clinical data and no similar  data  (based  on
    the same samples)[146]. Nevertheless, on the basis of preliminary results, Covidien's product seems promising and surgeons  which  indicated
    that they participate in Stellarex' trials[147] consider that Stellarex is comparable and possibly better  than  Medtronic's  DCB.[148]  One
    surgeon indicates that Stellarex tends to be a better product as, compared to Medtronic's device, it has an homogenous drug coating  on  the
    balloon. Others indicate that Stellarex is similar to Medtronic's DCB[149] and that it "might be the best and safest"[150], coming close  to
    Medtronic's DCB.[151]

135) The Commission acknowledges that, given the fact that Stellarex is not yet on the market, a comparison of this product with the  other  DCBs
    in terms of its clinical efficacy is not straightforward.[152] However, based on some objective criteria such as the characteristics of  the
    product as well as early returns from trials[153] it appears that both Covidien and  the  surgeons  testing  the  Stellarex  product  expect
    Stellarex to become a serious contender on the market for DCBs. Similarly, when comparing Medtronic's DCBs with those  of  its  competitors,
    some respondents to the Commission's market investigation  named  Covidien's  pipeline  product  as  the  most  similar  alternative/closest
    competitor of Medtronic in terms of product characteristics.[154]

136) Second, the amount of Covidien's clinical data, once completed will be very comparable, if not better than Medtronic's.  To  obtain  the  CE
    mark, Covidien conducted two trials: one in Germany – the Illumenate study and the second as a first-in-human trial which  involved  [number
    of] patients treated with a pre-dilation balloon. Additional trials are also taking place primarily  for  FDA  approval,  such  as  the  IDE
    testing involving [number of]  patients. The totality of Covidien’s clinical tests involves [number of]  patients (although a proportion  of
    these will not be treated with a DCB as they form part of a randomised trial).[155]

137) Third, contrary to Medtronic's claims, it does not appear necessary to have coated balloons in other areas to be a  strong  player  in  DCBs
    for peripheral vascular diseases and vice versa. One customer for example indicates BBraun as market leader for coronary DCBs in  cardiology
    which does not appear to have a DCB in the endovascular space.[156] Likewise Bard, which  the  Notifying  Party  considers  as  the  closest
    competitor to Medtronic, is not a player in coronary DCBs. In addition, Medtronic itself withdrew from the market a DCB  for  indicated  for
    below-the-knee lesions[157], which further shows that leadership in a close area (even closer than coronary) is not sufficient  for  success
    in another area.

138) In addition, in Medtronic's internal documents, Covidien's DCB is often included among the products  which  are  compared  with  Medtronic's
    existing DCB.

139) Lastly, the claim that Stellarex would not be marketed at prices comparable to Medtronic's DCBs is  not  supported  by  the  information  in
    Covidien's internal documents. Indeed, the average selling price considered by Covidien is similar to Medtronic's average selling  price  of
    its DCBs.[158]

140) Therefore, on the basis of the market investigation, the Commission considers that Covidien's Stellarex has the  potential  for  becoming  a
    very effective DCB, possibly even better than Medtronic's product and thus become a serious challenger to Medtronic's  leading  position  in
    the EEA.

5 Medtronic's intention to stop the development of Stellarex would be detrimental for DCB patients and harm innovation in the market

141) DCBs are new and innovative products in the area of peripheral vascular devices on which Covidien has traditionally focused.  Stellarex  was
    one of Covidien's latest developments and, absent the Transaction, Covidien would have continued to invest in  developing  the  product  and
    completing the trials. In fact, Covidien already invested USD […] million in the development of Stellarex (the biggest cost  being  the  R&D
    and the trials)[159], hired more than [number of]  people in this project, activated [number  of]  sites,  treated  more  than  [number  of]
    patients[160] and expected to invest additional USD […] million in R&D and clinical trial costs until 2019.[161]

142) In addition, Covidien expected to reach between [0-5]% market shares in the EU in 2014 and up to [20-30]% in  2018.[162]  According  to  the
    latest internal presentation of Covidien, it expected to gain a market share of [5-10]% in 2015, to sell  [number  of]  units  and  to  gain
    revenues of USD […].[163] In total on this market, Covidien expected to gain up to EUR […] million in revenues in the EU  by  2018.[164]  In
    addition to the most frequent above the knee indication, Covidien also committed resources to develop DCB  for  below  the  knee  indication
    showing the commitment to innovation in this space.

143) In its internal documents, Covidien states that it intends to be a clear first choice for customers,  ideas  and  investment  by  delivering
    breakthroughs in the prevention and treatment of vascular diseases worldwide.[165] One building block in such strategy  is  to  "execute  on
    lower limb breakthrough (DCB,…)". It expects to become the scientific leader and get ahead of Medtronic and Bard in the field  of  DCBs[166]
    and be the "clear first choice for DCB".[167]

144) In particular in the SFA treatment, Covidien intended to be the driver in the developing SFA treatment paradigm, build on  their  innovative
    power and drive clinical evidence. Its objective was therefore to launch Stellarex by differentiation. While Covidien's product would  enter
    the market later that the other manufacturers, Covidien is ready to launch the product in late 2014 or Q1 2015 with  a  focus  on  countries
    with reimbursement and expected to gain traction in Germany, UK, Italy and Spain.[168]

145) Once Medtronic acquires Covidien, it appears from Medtronic's internal planning that it is  expected  that  the  development  of  Covidien's
    product will be put to an end. This means that the Transaction will have as an effect an elimination of a serious  future  competitor  as  a
    result of which DCB patients will be deprived of an innovative and potentially a very effective device.

3 Conclusion

146) Based on the above the Commission considers that the elimination of Covidien's pipeline product  following  the  proposed  Transaction  will
    result in the loss of a credible competitor which absent the Transaction would likely have constrained Medtronic  on  the  market  for  drug
    coated balloons in the EEA, where Medtronic is currently the market leader. Furthermore, the Commission considers that the players that  are
    currently on the market would not exert sufficient competitive pressure on the merged entity post-Transaction.

147) In addition, the Transaction will also have a significant effect on innovation in these markets as Covidien had the  ability  and  incentive
    to continue innovation by further investing in clinical trials and developing Stellarex into a strong contender on the market including  for
    indications for which Medtronic's device is not currently approved.

148) Therefore, in light of all available evidence, the Commission considers that the Transaction raises serious doubts as to  its  compatibility
    with the internal market on the market for DCBs.

3 CTO crossing devices

149) Medtronic does not currently market a CTO crossing device in the EEA but it has  a  pipeline  product,  TOTAL  CTO,  a  re-entry  device  in
    development.

150) Medtronic explained that this CTO is a crossing device likely to be indicated for all lesions with CTO, but with a specific focus on  larger
    vessels, such as SFA arteries.

151) Covidien currently markets two CTOs: (i) Viance, a recanalization device indicated for use in all lesions with CTO,  which  has  a  catheter
    size of 1.75mm, a working length of 150mm and is compatible with a 0.014” guidewire and (ii) Enteer, which is a  re-entry  device  indicated
    for use in all lesions with CTO, but with a specific focus on below the knee procedures. Enteer has a catheter size of 1.75mm and a  working
    length of 135-300mm and is compatible with a 0.018” guidewire.

152) The presence of Covidien on the CTO market in the various EEA countries is rather limited. If all CTO crossing devices  are  considered,  in
    2013, its market shares only exceed 20% in Denmark ([30-40]%), Finland ([20-30]%),  Norway  ([30-40]%)  and  Sweden  ([40-50]%).[169]  If  a
    narrower market only for re-entry devices were considered (the CTO crossing devices on which Medtronic's  pipeline  product  and  Covidien's
    existing product overlap), in addition to the countries identified above, in 2013, Covidien's market share would exceed 20% in Austria ([20-
    30]%), Germany ([40-50]%), Italy ([30-40]%) and Spain ([20-30]%).

153) Medtronic's entry is rather speculative at this stage. Medtronic has not begun discussions  with  any  EU  regulatory  agency  and  has  not
    conducted any clinical trials. It is still only in the design phase of development. In a  best  case  scenario,  Medtronic  could  launch  a
    commercially available CTO device in the EU in 2016 at the earliest.

154) The Notifying Party submits that the Transaction will not negatively affect Medtronic’s CTO  crossing  devices  program.  Although  Covidien
    already markets a re-entry CTO crossing device, the products would be complementary: Medtronic’s pipeline product is better suited  for  use
    in larger vessels (e.g., in SFA procedures) whereas Covidien’s is better suited for procedures  below  the  knee.  Thus,  according  to  the
    Notifying Party, there is no plan to discontinue Medtronic’s program.

155) The Commission notes that Covidien does not appear to have a strong presence on the CTO market. In 2013, Covidien generated  sales  of  only
    EUR […] million in the EEA. The Notifying Party argues that the EU-wide market leader in this area is J&J with a share of [40-50]%  followed
    by Bard and Boston Scientific.

156) Indeed, other suppliers of CTO devices appear to have a much more established presence in the  EEA.  The  majority  of  respondents  to  the
    Commission's market investigation indicated that other medical device companies and in particular J&J and Boston  Scientific  would  be  the
    leading suppliers of CTOs in the EEA.[170] In addition, when comparing the various CTO devices on the  market,  respondents  indicated  that
    J&J's CTO would be very efficient, safe and leading to good results, compared to Covidien's CTO which is primarily  praised  for  its  price
    rather than technical capability.[171] J&J also identifies price as the advantage of Covidien's CTO, while for its own  CTO,  J&J  considers
    that it has a precise re-entry capability and high success rate.[172]

157) Therefore, in view of all these elements, the  Commission  concludes  that  the  Transaction  does  not  raise  serious  doubts  as  to  its
    compatibility with the internal market in relation to CTO crossing devices in the EEA.

3 Electrosurgical devices

158) Electrosurgical devices are energy-activated devices used in surgery that conduct electrical current through a patient's  body  to  generate
    heat energy in order to create a desired clinical effect (cut, coagulate, seal, etc.). Electrosurgical devices are commonly used in a  broad
    range of laparoscopic and open surgical procedures instead of mechanical cutting and sealing devices, as  they  make  surgical  intervention
    more effective and reduce patient trauma.

159) Electrosurgery procedures include the use of a generator, a hand piece, active and return electrodes, cables  connecting  the  generator  to
    the other devices and a switch to activate the procedure. Depending on the polarity of  the  handpiece  used,  procedure  are  monopolar  or
    bipolar. Handpieces may be reusable or disposable.

160) Through the sale of MicroFrance to Integra Life Sciences Medtronic divested most of its electrosurgical devices. Medtronic will continue  to
    market only few sets of advanced electrosurgical devices, namely PlasmaBlade, Aquamantys and a series of monopolar sealers,  which  will  be
    added to Covidien's electrosurgical portfolio post-Transaction.

161) The Notifying Party submits that within the area of electrosurgical devices, the Transaction is likely to lead  to  horizontal  overlaps  on
    the market for electrosurgical pencils and PlasmaBlade and the market for Large Surface Coagulation devices (LSCs).

1 Product market definition

162) The Notifying Party submits that electrosurgical devices could  be  split  in  standard  electrosurgical  devices  ("standard  ED"s),  which
    constitute commodity devices, and more complex advanced electrosurgical devices ("AED"s).[173]

163) Moreover, the Notifying Party considers that the market for electrosurgical devices can be further segmented on the  basis  of  the  various
    devices' functionality. Different product markets for electrosurgical pencils, LSCs, open surgery electrosurgical  forceps,  vessel  sealing
    and dissection devices etc. were thus identified.

164) During the market investigation the majority of customers and competitors also analysed the market on the  basis  of  the  various  devices'
    functionality and were familiar with the above-mentioned product groups.[174]

1 Electrosurgical pencils and PlasmaBlade

165) Electrosurgical pencils are very common operating room tools, used to cut and coagulate skin and tissue during the initial  incision  or  in
    the course of a broad range of procedures. PlasmaBlade can perform the same functions but is a very advanced, non-commoditised device, using
    pulsed radiofrequency and plasma electrodes. PlasmaBlade creates much smaller tissue damage when used and is  therefore  better  suited  for
    demanding, high end niche applications, such as cardiac rhythm disease management or  plastic  surgery  procedures.  Besides,  the  cost  of
    PlasmaBlade is not comparable to that of electrosurgical pencils, as it has an average  price  of  EUR  [180-300],  whereas  electrosurgical
    pencils are priced at EUR 1 to 4.[175]

1 Notifying Party's views

166) On the basis of a sub-segmentation of the market by functionality, the Notifying Party submits that PlasmaBlade should be  on  a  market  of
    its own. The closest sub-segment to PlasmaBlade in terms of functionality would be that  of  electrosurgical  pencils;  Medtronic's  product
    however has distinct characteristics in terms of technology, price and sophistication.[176]

167) A further  sub-segmentation  among  reusable  and  disposable  electrosurgical  pencils  is  suggested  by  the  Notifying  Party,  as  some
    electrosurgical pencils are designed for use in a single procedure, whereas others are used multiple times.[177]

168) Lastly, the Notifying Party examines whether a further sub-segmentation according to the type of procedure in which electrosurgical  pencils
    are used would be of relevance. Since most electrosurgical devices are indicated for many different procedures and since, even when  certain
    degree of specialisation is provided, suppliers offer products for the full  range  of  procedures  to  address  all  customers  needs,  the
    Notifying Party concludes that there is no need to consider separate markets on the basis of procedure.

2 Assessment of the Commission

169) During the Commission's market investigation, customers and competitors also characterise PlasmaBlade as  a  more  advanced  electrosurgical
    pencil; responses were however inconclusive as to whether it can in all cases be substituted by standard  electrosurgical  pencils.  In  any
    case, due to the significant difference in pricing, customers tend to use PlasmaBlade mostly in cardiac or plastic surgery procedures.[178]

170) Regarding further possible sub-segmentations of this market, customers indicate that they tend to purchase  either  reusable  or  disposable
    devices, but do not alternate between the two.[179] Similarly, all responding manufacturers submit that the production of  reusable  pencils
    differs significantly from that of disposable ones and that they produce both types of electrosurgical pencils.[180]

171) Moreover, no further sub-segmentation was identified as relevant during the market investigation, especially  as  most  customers  indicated
    that they use standardised electrosurgical pencils for all procedures and  most  competitors  confirmed  that  electrosurgical  pencils  for
    various applications follow the same manufacturing and authorisation process.[181]

3 Conclusion

172) In light of the above, the Commission concludes that PlasmaBlade would indeed most probably form part  of  the  market  for  electrosurgical
    pencils. Moreover, a further sub-segmentation among reusable and disposable electrosurgical pencils may be considered. In any event, for the
    purpose of the present decision it is not necessary to conclude whether the market for electrosurgical devices should include PlasmaBlade or
    should be further subdivided, as the Transaction does not give rise to serious doubts as to its compatibility with the  internal  market  in
    relation to electrosurgical pencils irrespective of the exact product market definition.

2 Large Surface Coagulation Devices

173) Medtronic's Aquamantys and monopolar sealers are large surface coagulation devices ("LSC"s).  These  advanced  electrosurgical  devices  are
    used in procedures in which significant bleeding control is required, such as in the removal of an organ  or  portion  of  an  organ,  joint
    replacement revision, etc. LSCs are used to coagulate small vessels of 1-2 mm. LSCs include devices operating through various  technologies,
    such as argon gas plasma-based technology, saline-based technology, gelatin-based technology, air/nitrogen-based  technology  or  hemostatic
    patches.

1 Notifying Party's views

174) The Notifying Party submits that there is a sub-segment within the market for electrosurgical  devices  for  LSCs.  In  addition,  Medtronic
    claims that saline-based and argon-based LSCs are not part of the same market, as further to being based on  different  technologies,  their
    design and development processes are different, they are priced differently and require different surgeon training.[182]

175) The Notifying Party does not identify any further relevant sub-segmentation in this market. Different market segments on the  basis  of  the
    procedure in which LSCs are used could be considered. As however all providers  market  multi-purpose  devices  that  can  be  used  in  all
    procedures requiring the use of LSCs, the Notifying Party concludes that such further segmentation of the product market  would  not  be  of
    relevance. Even when manufacturers also market specialised LSCs, these operate and are priced similarly, differing only  in  certain  design
    features. Companies could therefore easily switch production among the  various  specialised  models,  should  there  be  sufficient  market
    demand.[183]

176) The Notifying Party also assesses whether a distinction between monopolar and  bipolar  LSCs  should  be  made.  Since  the  electrosurgical
    generators that power the LSCs are equipped with both types of connections and LSC manufacturers are familiar with both types of  technology
    and can easily and quickly shift production from monopolar to bipolar devices, the Notifying  Party  concludes  that  such  sub-segmentation
    should not be made.[184]

2 Assessment of the Commission

177) The suggested division among LSCs based on different types of technologies was investigated by the Commission;  responses  from  the  market
    participants however were non-conclusive as to the exact scope of the relevant product market.

178) LSCs appear to have different characteristics, depending on the technology, on the basis of which they operate,  customers  and  competitors
    however did not clearly identify separate markets for argon-based,  saline-based  or  other  non-energy  based  LSCs.  Similarly,  no  other
    segmentations on the basis of polarity or the procedure for  which  the  various  devices  are  used  were  considered  relevant  by  market
    participants in relation to LSCs.[185]

3 Conclusion

179) In light of the above, the Commission concludes that a market for all LSCs could be considered, as well as narrower markets on the basis  of
    the technology or the procedure on which each device is based. In any event, for the purpose of the present decision it is not necessary  to
    conclude on the exact scope of the market for LSC devices as the Transaction does not give rise to serious doubts as  to  its  compatibility
    with the internal market in relation to LSC devices irrespective of the exact product market definition.

3 Conclusion on product market definition

180) As no competition concerns would arise as to the compatibility of the Transaction with  the  internal  market  under  any  plausible  market
    definition of electrosurgical devices, it may be left open whether a single market for all electrosurgical  devices,  separate  markets  for
    standard and advanced devices or further sub-segmentations on the  basis  of  functionality  and  possibly  also  of  durability  should  be
    considered.

2  Geographic market definition

181) The Commission has in previous cases defined the geographic market for medical devices as national.[186] Even though from a supply  side  an
    EEA-wide market would be of relevance, given the CE mark, the centralised production and rather low transport costs and the lack of national
    marketing and distribution barriers, there are significant differences among EEA countries in reimbursement schemes, procurement  procedures
    and pricing. Moreover, customers tend to only source products from their own country and in cooperation with national or  even  local  sales
    offices. A further indication that markets are organised on a national basis is the variation of manufacturers'  market  shares  across  the
    EEA.[187]

182) The Notifying Party also submits that the geographic scope of the markets for electrosurgical devices is national.  The  results  of  market
    investigation lead to the same conclusion, as customers indicated that they have regional or national contact points,  in  order  to  easily
    follow up should training requirements or  problems  arise.  They  also  confirmed  that  they  have  not  and  would  not  consider  buying
    electrosurgical devices from providers outside their country. Similarly, manufacturers explained that they establish  their  presence  on  a
    country basis, either directly or through distributors, in view of customers' buying patterns and of regulatory and linguistic reasons.[188]

183) In view of these elements and coherently with previous decisions in medical devices  cases,  the  Commission  concludes  that  the  relevant
    geographic markets for the products described in the section of relevant product markets are national.

3 Assessment

184) The market for EDs is growing at a rate of 3-5% per year, because of favourable demographics, the increase of procedures involving  the  use
    of EDs and the significant innovation in the sector.

185) Within the market for EDs the picture however differs for non-advanced devices and for advanced devices. The non-advanced  segments  of  the
    market (e.g. the market for electrosurgical pencils) are mature, as these products have been used for decades. Market growth in these market
    segments is rather low, whereas in relation to advanced electrosurgical devices the market  has  been  growing  significantly  in  the  last
    years.[189]

186) The market for electrosurgical devices, particularly  regarding  advanced  electrosurgical  devices,  is  characterised  by  innovation  and
    attracts significant R&D spend, as new and improved versions of already existing devices are regularly introduced.[190] In order to launch a
    new product, manufacturers start by engaging in R&D, must then acquire the necessary regulatory approval (CE mark and on  occasion  approval
    by national authorities), followed by the manufacturing stage and the distribution and servicing. Ensuring new  devices'  reimbursement  can
    also be a key factor in ensuring their effective market launch.

    1. All electrosurgical devices

187) Table 13 below sets out the Parties' position in a market for all electrosurgical devices in the countries where  their  activities  overlap
    and give rise to affected markets:

    Table 13 - All electrosurgical devices (2013)

|Country                        |Medtronic (%)           |Covidien (%)                    |Combined shares                  |
|Austria                        |[0-5]%                  |[50-60]%                        |[50-60]%                         |
|Belgium                        |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Croatia                        |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Czech Republic                 |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Denmark                        |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|Finland                        |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|France                         |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|Germany                        |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Ireland                        |[0-5]%                  |[40-50]%                        |[50-60]%                         |
|Italy                          |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Malta                          |[0-5]%                  |[50-60]%                        |[50-60]%                         |
|Netherlands                    |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|Poland                         |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Portugal                       |[0-5]%                  |[40-50]%                        |[40-50]%                         |
|Romania                        |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|Slovakia                       |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|Slovenia                       |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|Spain                          |[0-5]%                  |[40-50]%                        |[40-50]%                         |
|Sweden                         |[0-5]%                  |[40-50]%                        |[40-50]%                         |
|United Kingdom                 |[0-5]%                  |[20-30]%                        |[20-30]%                         |
|EU Total                       |[0-5]%                  |[30-40]%                        |[30-40]%                         |
|Norway                         |[0-5]%                  |[40-50]%                        |[40-50]%                         |
|EEA Total                      |[0-5]%                  |[30-40]%                        |[30-40]%                         |

    Source:  Form CO

188) As can be seen in Table 13 above, the Parties' combined market shares exceed 35% in certain markets; the increment however does  not  exceed
    1.4% in any market. The Transaction does not therefore have an impact on the structure of the market in any of these EEA countries.

189) The merged entity is likely to continue to face strong competitive pressure from several  large  multinational  suppliers  post-Transaction,
    including J&J/Ethicon ([20-30]%), ERBE ([10-20]%), Olympus ([5-10]%), 3M  ([0-5]%)  and  others,  which  also  have  a  broad  portfolio  of
    electrosurgical devices.

190) Therefore, the Commission concludes that the Transaction does not therefore raise serious doubts as to its compatibility with  the  internal
    market in relation to all electrosurgical devices.

    2. Advanced electrosurgical devices (AEDs)

191) Table 14 below provides an overview of the Parties' position in a narrower market for all advanced electrosurgical devices in the  countries
    where their activities overlap and give rise to affected markets:

    Table 14 - All advanced electrosurgical devices (2013)

|Country                   |Medtronic (%)                  |Covidien (%)                    |Combined shares                  |
|Austria                   |[0-5]%                         |[60-70]%                        |[60-70]%                         |
|Belgium                   |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|Bulgaria                  |[0-5]%                         |[10-20]%                        |[10-20]%                         |
|Croatia                   |[0-5]%                         |[10-20]%                        |[20-30]%                         |
|Czech Republic            |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|Denmark                   |[0-5]%                         |[40-50]%                        |[40-50]%                         |
|Estonia                   |[0-5]%                         |[10-20]%                        |[10-20]%                         |
|Finland                   |[0-5]%                         |[30-40]%                        |[30-40]%                         |
|France                    |[0-5]%                         |[30-40]%                        |[30-40]%                         |
|Germany                   |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|Greece                    |[0-5]%                         |[10-20]%                        |[20-30]%                         |
|Hungary                   |[0-5]%                         |[10-20]%                        |[10-20]%                         |
|Ireland                   |[0-5]%                         |[70-80]%                        |[70-80]%                         |
|Italy                     |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|Latvia                    |[0-5]%                         |[10-20]%                        |[10-20]%                         |
|Lithuania                 |[0-5]%                         |[5-10]%                         |[5-10]%                          |
|Malta                     |[0-5]%                         |[60-70]%                        |[60-70]%                         |
|Netherlands               |[0-5]%                         |[30-40]%                        |[30-40]%                         |
|Poland                    |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|Portugal                  |[0-5]%                         |[40-50]%                        |[40-50]%                         |
|Romania                   |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|Slovakia                  |[0-5]%                         |[30-40]%                        |[30-40]%                         |
|Slovenia                  |[0-5]%                         |[30-40]%                        |[30-40]%                         |
|Spain                     |[0-5]%                         |[40-50]%                        |[40-50]%                         |
|Sweden                    |[0-5]%                         |[50-60]%                        |[50-60]%                         |
|United Kingdom            |[0-5]%                         |[20-30]%                        |[20-30]%                         |
|EU Total                  |[0-5]%                         |[30-40]%                        |[30-40]%                         |
|Norway                    |[0-5]%                         |[50-60]%                        |[50-60]%                         |
|EEA Total                 |[0-5]%                         |[30-40]%                        |[30-40]%                         |

    Source:  Form CO

192) As can be seen in Table 14 above, the Parties' combined market shares exceed 35% in few national markets, the increment however  is  in  all
    cases very limited, not exceeding 2%. The Transaction does not therefore have an impact on the structure of the market in any of  these  EEA
    countries.

193) In addition, the merged entity will continue to face  strong  competition  from  several  large  multinational  suppliers  post-Transaction,
    including J&J/Ethicon ([30-40]%), ERBE ([5-10]%), Olympus ([10-20]%), Aesculap ([0-5]%) or Martin ([0-5]%).

194) In addition hospital customers in the various EEA countries have significant buyer power,  as  they  ensure  through  tenders  or  bilateral
    negotiations the procurement of electrosurgical devices on competitive terms.

195) Moreover, the Parties' portfolio in this space is highly complementary. As a result, the products of Medtronic are not close competitors  to
    those of Covidien and do not currently exert strong competitive constraint on each other.

196) In view of these elements, the Commission concludes that the Transaction does not raise any  concerns  as  to  its  compatibility  with  the
    internal market in relation to advanced electrosurgical devices.

1 Electrosurgical pencils and PlasmaBlade

197) The Parties' activities overlap in a market for electrosurgical pencils and PlasmaBlade. Medtronic is only present in this  space  with  the
    PlasmaBlade product line. Covidien on the other hand manufactures standard commodity electrosurgical pencils. Covidien markets both reusable
    and disposable pencils of different sizes and with some degree of differentiation on their characteristics  to  better  adapt  them  to  the
    requirements of specific procedures.

198) Table 15 below sets out the Parties' position in a market for all electrosurgical pencils  including  PlasmaBlade  in  the  countries  where
    their activities overlap and give rise to affected markets:

Table 15 - Electrosurgical pencils including PlasmaBlade

|Country               |Market Size     |Medtronic Share |Covidien Share  |                |                |                |
|                      |(€ m)           |(%)             |(%)             |Combined Share  |Combined Share  |Combined Share  |
|                      |                |                |                |(%) 2013        |(%) 2012        |(%) 2011        |
|Norway                |0.328           |[0-5]%          |[20-30]%        |[20-30]%        |[20-30]%        |N/A             |
|EEA Total                                           |29.564                     |[0-5]%                              |[0-5]%                  |[5-10]%                        |N/A                     |
|[…]                                                 |Australia                  |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Australia                  |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |Canada                     |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Canada                     |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |China                      |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |China                      |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |European Patent            |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |European Patent            |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Hong Kong                  |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |Hong Kong                  |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Japan                      |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Japan                      |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Japan                      |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |New Zealand                |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |New Zealand                |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Patent Cooperation Treaty  |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Patent Cooperation Treaty  |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |[…]                            |[…]                     |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |Patent Cooperation Treaty  |[…]                                 |[…]                     |                               |                        |
|[…]                                                 |United States of America   |[…]                                 |[…]                     |                               |                        |
            ▪

                                                           Annex 2 – List of Employees

|Name                                |Job Title                                |
|[…]                                 |PV Group Management                      |
|[…]                                 |Staff Dev Engineer                       |
|[…]                                 |Euro Sr. CRA                             |
|[…]                                 |Supv Production                          |
|[…]                                 |Lead Assembler                           |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |Production Super                         |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |PV Group Management                      |
|[…]                                 |Ops Quality Eng II                       |
|[…]                                 |Dev Engineer I                           |
|[…]                                 |Focus Factory Mgr II                     |
|[…]                                 |PV Group Management                      |
|[…]                                 |Assembler I                              |
|[…]                                 |Euro Clin Project Mgr                    |
|[…]                                 |Mgr Clinical Educ                        |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |Assembler I                              |
|[…]                                 |PV Group Management                      |
|[…]                                 |Prog Mgr Clinical Affairs                |
|[…]                                 |Sr RA Product Spec                       |
|[…]                                 |Sr Dir Clinical Affairs                  |
|[…]                                 |PV Group Management                      |
|[…]                                 |Sr Clinical Research Assoc               |
|[…]                                 |PV Group Management                      |
|[…]                                 |Supv Quality Testing                     |
|[…]                                 |Euro Clin Field Specialist               |
|[…]                                 |Quality Tech II                          |
|[…]                                 |Mgr Clinical Educ                        |
|[…]                                 |Mgr Clinical Affairs                     |
|[…]                                 |Document Coord I                         |
|[…]                                 |Euro Lead CRA                            |
|[…]                                 |PV Group Management                      |
|[…]                                 |Staff Dev Scientist                      |
|[…]                                 |Ops Quality Engineer I                   |
|[…]                                 |Proj Mgr Clinical                        |
|[…]                                 |Prin Ops Quality Engineer                |
|[…]                                 |Staff Dev Engineer                       |
|[…]                                 |Assembler I                              |
|[…]                                 |Sr Analytical Chemist                    |
|[…]                                 |Chemist I                                |
|Name                                |Job Title                                |
|                                    |                                         |
|[…]                                 |Proj Mgr Clinical                        |
|[…]                                 |Dev Engineer I                           |
|[…]                                 |Mgr Clinical Educ                        |
|[…]                                 |Dev Eng Tech III                         |
|[…]                                 |Analytical Chemist Fellow                |
|[…]                                 |PV Group Management                      |
|[…]                                 |Dev Engineer II                          |
|[…]                                 |Clinical Research Assoc II               |
|[…]                                 |Clinical Research Coord III              |
|[…]                                 |PV Group Management                      |
|[…]                                 |Dev Engineer II                          |
|[…]                                 |Quality Tech IV                          |
|[…]                                 |Clinical Research Coord III              |
|[…]                                 |Dir Proj Eng                             |
|[…]                                 |Chemical Process Tech IV                 |
|[…]                                 |Mgr Clinical Research                    |
|[…]                                 |Assoc Product Mgr                        |
|[…]                                 |Mgr Dev Eng                              |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |Quality Tech IV                          |
|[…]                                 |Sr Proj Mgr Prod Dev                     |
|[…]                                 |Mgr Proj Eng                             |
|[…]                                 |Euro Sr. Clin Tech Field Specialist      |
|[…]                                 |PV Group Management                      |
|[…]                                 |Dev Engineer II                          |
|[…]                                 |Admin Coord IV                           |
|[…]                                 |Sr Clinical Research Assoc               |
|[…]                                 |Dir Ops Quality / Fremont Site Leader    |
|[…]                                 |Mgr Clinical Educ                        |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |Doc Spec II                              |
|[…]                                 |PV Group Management                      |
|[…]                                 |Euro Sr. Clin Field Specialist           |
|[…]                                 |Prin Dev Engineer                        |
|[…]                                 |PV Group Management                      |
|[…]                                 |QC Inspector Tech II                     |

|Name                                |Job Title                                |
|[…]                                 |Ops Quality Eng II                       |
|[…]                                 |Prin Dev Engineer                        |
|[…]                                 |Assembler I                              |
|[…]                                 |Sr Clinical Research Coord               |
|[…]                                 |AUS/NZ Sr. Clin Field Spe                |
|[…]                                 |PV Group Management                      |
|[…]                                 |Assoc Product Mgr                        |
|[…]                                 |QC Inspector Tech III                    |
|[…]                                 |Sr Ops Quality Eng                       |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |PV Group Management                      |
|[…]                                 |Sr Dev Engineer                          |
|[…]                                 |Euro Clin Program Mgr                    |
|[…]                                 |Euro Clin Field Specialist               |
|[…]                                 |Sr Chemist                               |
|[…]                                 |PV Group Management                      |
|[…]                                 |Dev Engineer I                           |
|[…]                                 |Mgr Clinical Educ                        |
|[…]                                 |PV Group Management                      |
|[…]                                 |PV Group Management                      |
|[…]                                 |RA Ops Spec                              |
|[…]                                 |Sr Product Mgr                           |
|[…]                                 |Prin Dev Engineer                        |

                                              Annex 3 – PTA License Patents and Patent Applications

|Patent Title                     |Country/Jurisdiction                     |Application No.     |Filed Date     |Patent No.        |Issue Date         |
|[…]                              |Patent Cooperation Treaty                |[…]                 |[…]            |                  |                   |
|[…]                              |European Patent                          |[…]                 |[…]            |                  |                   |
|[…]                              |United States of America                 |[…]                 |[…]            |[…]               |[…]                |
|[…]                              |France                                   |[…]                 |[…]            |                  |                   |
|[…]                              |Germany                                  |[…]                 |[…]            |                  |                   |
|[…]                              |Ireland                                  |[…]                 |[…]            |                  |                   |
|[…]                              |Italy                                    |[…]                 |[…]            |                  |                   |
|[…]                              |Netherlands                              |[…]                 |[…]            |                  |                   |
|[…]                              |Spain                                    |[…]                 |[…]            |                  |                   |
|[…]                              |United Kingdom                           |[…]                 |[…]            |                  |                   |
|[…]                              |United States of America                 |[…]                 |[…]            |[…]               |[…]                |
|[…]                              |United States of America                 |[…]                 |[…]            |                  |                   |

                 Annex 4: Stellarex Organizational Chart

    This Annex contains Stellarex Organizational Chart.

                                                                      [pic]
                                                                      [pic]
                                                                      [pic]
                                                         Annex 5 - Trademark Applications

|Mark                         |Country                            |Class Description                                                            |Application No.            |Filed Date              |
|ENDURACOAT                   |U.S.A.                             |5 – Pharmaceutical preparations used for the treatment of cardiovascular     |[…]                        |[…]                     |
|                             |                                   |disease; Pharmaceutical preparations in the nature of surgical coatings used |                           |                        |
|                             |                                   |to treat blockage in blood vessels and arteries; Drug delivery agents in the |                           |                        |
|                             |                                   |form of surgical coatings used to treat blockage in blood vessels and        |                           |                        |
|                             |                                   |arteries                                                                     |                           |                        |
|                             |                                   |10 – Surgical instruments and apparatus; medical apparatus and instruments   |                           |                        |
|                             |                                   |for use in treating cardiovascular disease; drug coated angioplasty balloons;|                           |                        |
|                             |                                   |drug coated angioplasty balloon system, namely, surgical and medical         |                           |                        |
|                             |                                   |apparatus and instruments for use in angioplasty surgery; surgical balloons  |                           |                        |
|                             |                                   |for use in angioplasty surgery                                               |                           |                        |
|ENDURACOAT                   |European Community                 |5 - Pharmaceutical preparations used for the treatment of cardiovascular     |[…]                        |[…]                     |
|                             |                                   |disease; Pharmaceutical preparations in the nature of surgical coatings used |                           |                        |
|                             |                                   |to treat blockage in blood vessels and arteries; Drug delivery agents in the |                           |                        |
|                             |                                   |form of surgical coatings used to treat blockage in blood vessels and        |                           |                        |
|                             |                                   |arteries,                                                                    |                           |                        |
|                             |                                   |10 - Surgical instruments and apparatus; medical apparatus and instruments   |                           |                        |
|                             |                                   |for use in treating cardiovascular disease; drug coated angioplasty balloons;|                           |                        |
|                             |                                   |drug coated angioplasty balloon system, namely, surgical and medical         |                           |                        |
|                             |                                   |apparatus and instruments for use in angioplasty surgery; surgical balloons  |                           |                        |
|                             |                                   |for use in angioplasty surgery                                               |                           |                        |
|STELLAREX                    |U.S.A.                             |10 – Drug coated angioplasty balloon and drug coated angioplasty balloon     |[…]                        |[…]                     |
|                             |                                   |system, namely, surgical and medical apparatus and instruments for use in    |                           |                        |
|                             |                                   |angioplasty surgery                                                          |                           |                        |
|Mark                         |Country                            |Class Description                                                            |Application No.            |Filed Date              |
|STELLAREX                    |European Community                 |10 – Drug coated angioplasty balloon and drug coated angioplasty balloon     |[…]                        |[…]                     |
|                             |                                   |system, namely, surgical and medical apparatus and instruments for use in    |                           |                        |
|                             |                                   |angioplasty surgery                                                          |                           |                        |

                                                             -----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.

[2]   Publication in the Official Journal of the European Union No C371, 18.10.2014, p. 21.

[3]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p. 1).

[4]   Form CO, paragraph 32.

[5]   A substance used to enhance the contrast of structures or fluids within the body in medical imaging.

[6]   It is possible to address entirely blocked lesions through a new, second incision from "below" the lesion. This is an  alternative  to  the
use of CTO crossing devices. This option is frequently used in Europe, which leads to low levels of usage for CTO crossing devices.

[7]   A re-narrowing of the blood vessel.

[8]   Case M.3687 Johnson & Johnson / Guidant,  L173 Of 27.06.2006.

[9]   Case M.4150 Abbott / Guidant,  C256 Of 24.10.2006.

[10]  Case M.3687 Johnson & Johnson / Guidant, recitals 34-54; Case M.4150 Abbott / Guidant, paragraphs 25-35.

[11]  Case M.3687 Johnson & Johnson / Guidant, recital 47; Case M.4150 Abbott / Guidant, paragraph 31.

[12]  Case M.3687 Johnson & Johnson / Guidant, recitals 40-45.

[13]  Case M.3687 Johnson & Johnson / Guidant, recital 46.

[14]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 8 and 8.1.

[15]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 11 and 11.1.

[16]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 16.1; replies to Questionnaire Q2  –  Competitors  Peripheral
vascular devices, Questions 12 and 13.1.

[17]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 13.

[18]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 86.

[19]  Case M.3687 Johnson & Johnson / Guidant, recitals 49 and 52.

[20]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 48.

[21]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 48.

[22]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 48.1 and 48.2.

[23]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Questions 33 and 33.1.

[24]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Questions 31 and 31.1.

[25]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Questions 28 and 28.1.

[26]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 22.

[27]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 23 and 24.

[28]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 25 and 25.1.

[29]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 45; Minutes of a conference call with  a  competitor,  on  31
October 2014, paragraph 13.

[30]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Questions 15.1, 16 and 16.1.

[31]  Distal occlusion balloons were the first type of EPD to be  marketed.  They  are  no  longer  sold  in  Europe  primarily  because  of  the
introduction of filter baskets, which are considered to be a higher quality product. Proximal occlusion  balloons  are  more  recent  still,  but
today account for only around 10% of European demand (filter baskets account for the remaining 90%).

[32]  Case M.3687 Johnson & Johnson / Guidant, recital 54.

[33]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 27.

[34]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 26.

[35]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 31.1.

[36]  Minutes of a conference call with a competitor, on 31 October 2014, paragraph 23.

[37]  For an analysis of drug eluting stents for coronary use, Commission's decision of 25 August 2005, M.3687 Johnson&Johnson/Guidant,  recitals
11-20.

[38]  Drug coated balloon catheters are sometimes called drug-eluting balloons, and  those  terms  are  interchangeable.  In  practice,  Covidien
considers that there may be a technical difference, because paclitaxel on a DCB is not implanted along with an elution matrix (as  would  be  the
case in a drug-eluting stent). Covidien considers the term "drug-coated balloon" to be scientifically the more accurate term.

[39]  A cell proliferation inhibitor often used in cancer treatment.

[40]        Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 32.1. In addition, at this stage there seems to  be  no
sufficient evidence that DCBs would be efficient in below the knee procedures.

[41]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 38.

[42]        Replies to Questionnaire Q1 - Customers peripheral vascular devices, Questions 32.3, 33 and 34

[43]        Replies to Questionnaire Q1 - Customers peripheral vascular devices, Questions 32.3 and 33.1.

[44]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 33.1.

[45]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Questions 33.1

[46]        Replies to Questionnaire Q1 - Customers peripheral vascular devices, Questions 36 and 37.

[47]        Replies to Questionnaire Q2 -  Competitors peripheral vascular devices, Question 20.

[48]        Replies to Questionnaire Q2 - Competitors peripheral vascular devices, Question 22.

[49]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 41.

[50]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 42.1 and 42.2.

[51]  Medtronic's internal document, Annex I.17 - Total CTO phase 0 PRC final 12192013 (19 December 2013, p. 5).

[52]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Question 24.

[53]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Question 26.

[54]  However, Boston Scientific prices both products at a similar price and Medtronic intends to sell its re-entry device at a lower price  than
existing CTO devices of both types.

[55]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Questions 25 and 25.1.

[56]  Case M.3687 Johnson & Johnson / Guidant, recitals 67-69.

[57]  Neither Party is active in the supply of bio-absorbable stents.

[58]  Response to request for information of the Commission to the Notifying Party ("RFI") 7, question 14.

[59]  Replies to Questionnaire Q2 – Competitors Peripheral vascular devices, Question 35.

[60]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 56.

[61]  The Commission will provide the market shares for these competitors per product and in  each  of  the  EEA  countries  assessed  below,  as
submitted by the Notifying Party. The Commission's market investigation revealed that, for some of these products in some countries, there was  a
different ranking of the other competitors than that indicated by the Notifying Party. However, the Commission's conclusions remain the same.

[62]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 79.

[63]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Questions 59 and 70.

[64]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 85.1.

[65]  Should the market for BX stents be further divided by indication, the only additional affected markets would be the  market  for  iliac  BX
stents and the market for renal BX stents in Estonia with a combined market share of [20-30]%, representing respectively sales  of  EUR  […]  and
EUR […], and the market for renal BX stents in Italy with a combined market share of  [20-30]%.  In  any  event,  according  to  the  information
collected by the Commission during its market investigation, other existing competitors have sizeable presence in the market  for  BX  stents  in
Italy and are able to offer BX stents for both iliac and renal indications. Competition concerns can therefore be excluded in these markets.

[66]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 59.

[67]  Annex III.8.a to the Form CO.

[68]  Should the market for non-carotid SX stents be further divided by indication, the only additional affected markets would be the market  for
iliac SX stents and the market for SFA SX stents in Portugal with a combined market share of [20-30]%, but an increment  of  [0-5]%.  Competition
concerns can therefore be excluded in these markets.

[69]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 59.

(     Should read: is.

[70]  Annex III.8.a to the Form CO.

(     Should read: amounts.

[71]  Replies to Questionnaire Q1 – Customers Peripheral vascular devices, Question 59.

[72]  Annex III.8.a to the Form CO.

[73]  Replies to Questionnaire Q1- Customers peripheral vascular devices, Question 59.

[74]  Annex III.8.a to the Form CO.

[75]  Annex III.8.a to the Form CO.

[76]  Annex III.8.a to the Form CO.

[77]  The Transaction would not lead to any affected market on a potential segment for filter baskets, the only EPDs on which the Parties'  sales
overlap.

[78]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 59.

[79]  Annex III.8.a to the Form CO.

[80]  Annex III.8.a to the Form CO.

[81]  Annex III.8.a to the Form CO.

[82]  Guidelines on the assessment of horizontal mergers under the Council Regulation on the  control  of  concentrations  between  undertakings,
Official Journal C 31, 05.02.2004, p. 5-18.

[83]  Horizontal merger guidelines, paragraphs 22 and seq.

[84]  Horizontal merger guidelines, paragraphs 58-60.

[85]  Form CO, Annex 16, 1.2.1.2 Stellarex AVF, p. 8.

[86]  Form CO, Annex 16, EU DCB, Covidien document, p. 11.

[87]  For instance in 2018 the market for DCBs is expected to grow 34% vs 2017 and in 2019 it is expected to increase 14% vs 2018, see  Form  CO,
Annex 16, EU DCB, Covidien document, p. 13.

[88]  For PV stents growth of between 1-3% in most years and up to maximum 6% in 2023; for PTAs decrease of around 0.5%-1%, see  Form  CO,  Annex
16, EU DCB, Covidien document, p. 13.

[89]  Form CO, Annex III.37, Peripheral vascular leadership, Medtronic document.

[90]  Form CO, Annex III.37, Peripheral vascular leadership, Medtronic document.

[91]   Covidien  initiated  the  acquisition  process  in  November  2012  and  completed   the   acquisition   in   January   2013,   see   also
http://www.covidien.com/investor/phoenix.zhtml?c=207592&p=irol-newsArticle&ID=1773433

[92]  Response to RFI 7, question 14.

[93]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 87.

[94]  Replies to Questionnaire Q2 - Competitors peripheral vascular devices, Question 48.

[95]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 88 and Replies  to  Questionnaire  Q2-Competitors  peripheral
vascular devices, Question 49.

[96]  Form CO, Annex III.37, Bard Lutonix Attack Pack Final, slide 4, Annex III.37, Q1 FY15 DCB Overview Deck, slides 6-7.

[97]  These are Austria, Belgium, France, Germany, Italy, Spain, Sweden and the United Kingdom. See Annex III.6 to the Form CO.

[98]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 89; replies to  Questionnaire  Q2  -  Competitors  peripheral
vascular devices, Question 50.

[99]  Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 59.

[100]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 91.

[101]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 90.

[102]       Replies to Questionnaire Q1 - Customers peripheral  vascular  devices,  Question  72;  replies  to  Questionnaire  Q2  -  Competitors
peripheral vascular devices, Question 42.

[103]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 90.

[104]       Response to RFI 8, question 20.

[105]       The Notifying Party explains that the market shares for  competitors  are  pro  forma  estimates  of  the  current  position  of  the
competitors, based on the adoption rates in a given country, Medtronic’s own sales and estimates of its position,  which  hospitals/clinics  used
DCBs, and customer feedback.

[106]       Replies to Questionnaire Q1 - Customers peripheral  vascular  devices,  Question  72;  replies  to  Questionnaire  Q2  -  Competitors
peripheral vascular devices, Question 42.

[107]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 90.

[108]       Replies to Questionnaire Q2 - Competitors peripheral vascular devices, Question 51.

[109]       Submission of 22 October 2014, Covidien document, p. 26.

[110]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 90. See  also  Form  CO,  Annex  III.37,  Bard  Lutonix
Attack Pack Final, slide 19.

[111]       Form CO, Annex I.16, DCB Strategic Bet Review, EU Developed, January 14, p. 6.

[112]       According to the Notifying Party, the market value in these five latter countries together is of below EUR 300 000, which  is  merely
1% of the total EEA market for DCBs. If sales in France are included, the total market value would increase to EUR 1 million,  representing  only
4% of the total EEA market for DCBs. See Annex III.6 to the Form CO.

[113]       The Notifying Party explains that the market shares for  competitors  are  pro  forma  estimates  of  the  current  position  of  the
competitors, based on the adoption rates in a given country, Medtronic’s own sales and estimates of its position,  which  hospitals/clinics  used
DCBs, and customer feedback.

[114]       Eurocor was only mentioned as second closest after Bard by 1 respondent, see replies  to  Questionnaire  Q1  -  Customers  peripheral
vascular devices, Question 72 and replies to Questionnaire Q2 - Competitors peripheral vascular devices, Question 42.

[115]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 89.

[116]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 91.

[117]       Replies to Questionnaire Q1 - Customers peripheral vascular  devices,  Question  90;  replies  to  Questionnaire   Q2  -  Competitors
peripheral vascular devices, Question 51.

[118]       Minutes of a conference call with key opinion leader on 19 September 2014, paragraph 15. Similarly, the DCBs of  both  Medtronic  and
Covidien were initially developed by smaller companies, which could not continue developing them and thus sold them to  Medtronic  and  Covidien,
which seem to be large enough to continue innovating.

[119]       Replies to Questionnaire Q1 - Customers peripheral  vascular  devices,  Question  90;  replies  to  Questionnaire  Q2  -  Competitors
peripheral vascular devices, Question 51.

[120]       Replies to Questionnaire  Q2 - Competitors peripheral vascular devices,  Question 51.

[121]       Covidien recognises that Eurocor has a “strong commercial presence in the UK”, (see Form CO, Annex I.16, DCB  Strategic  Bet  Review,
EU Developed, January 14’, p. 6), however according to the information provided by the Notifying Party, Eurocor does  not  seem  to  be  stronger
than Bard and appears only half as big as Medtronic in the UK. Covidien most often benchmarks its product  against  Medtronics'  or  in  addition
against Bard's.

[122]       Submission of 22 October 2014, Covidien document, p. 26.

[123]       Submission of 22 October 2014, Covidien document, p. 26.

[124]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 87.

[125]       The Notifying Party explains that the market shares for  competitors  are  pro  forma  estimates  of  the  current  position  of  the
competitors, based on the adoption rates in a given country, Medtronic’s own sales and estimates of its position,  which  hospitals/clinics  used
DCBs, and customer feedback.

[126]       Only in rare occurrences was Biotronik named as second or third closest, see replies  to  Questionnaire  Q1  -  Customers  Peripheral
Vascular Devices, Question 72 and replies to Questionnaire Q2 - Competitors peripheral vascular devices, Question 42.

[127]       Replies to Questionnaire Q1 - Customers Peripheral  Vascular  Devices,  Question  90;  replies  to  Questionnaire  Q2  -  Competitors
Peripheral Vascular Devices, Question 51.

[128]       Annex III.6 to the Form CO.

[129]       Boston Scientific recently entered the market and undertook IDE Testing. However, in its internal documents,  Medtronic  itself  does
not seem to be considering Boston Scientific among the companies from which it would face competition. See for instance Form  CO,  Annex  III.37,
Peripheral competitive landscape, slide 14 in which only Bard,  Cook,  Biotronik,  Eurocor,  Covidien  and  Medrad  (Bayer)  are  listed.  Boston
Scientific appears somewhere else as "future competitor".

[130]       Medtronic sometimes refers to Cook's DCB. See for instance Form CO, Annex III.37,  Peripheral  competitive  landscape,  slide  7  and
slide 20.

[131]       Form CO, paragraph 302.

[132]       Submission of 22 October 2014, Covidien document, p. 25.

[133]       Marketing plan Covidien 2015, slide 46.

[134]       Form CO, Annex 16, Stellarex Q2FY14, Franchise Review, p. 59.

[135]       [Statements made by surgeons during the clinical trials for Stellarex]

[136]       Submission of 22 October 2014, Covidien document, p. 26.

[137]       Submission of 22 October 2014, p. 25, Covidien document. Note that Medtronic provided a PPR of 89.5% for Covidien in response to  RFI
8.

[138]       Form CO, Annex III.37, Peripheral competitive landscape, p. 20, Medtronic document. Note that Medtronic provided a PPR of  89.8%  for
Medtronic in response to RFI 8.

[139]       [Confidential statement regarding Covidien’s investments in  clinical  trials]  (see  Form  CO,  Annex  I.16,  Presentation  entitled
Stellarex Q2FY14 Franchise Review (Rev 16) Annex I.16).

[140]       [Number of]  patients will be involved overall in these trials, however as some trials are randomized,  not  all  of  these  patients
will receive a treatment with DCB.

[141]       Response to RFI 7 (revised), question 14.

[142]       In total, this is expected to amount to USD […] million, including the investment of CV Ingenuity.

[143]       Response to RFI 7 (revised), question 14 and Form CO, paragraph 296.

[144]       Form CO, Annex I.16, Franchise Review, slide 18 et seq.

[145]       Minutes of a conference call with a key opinion leader on 16 September 2014; minutes of a conference call with a key  opinion  leader
on 19 September 2014; minutes of a conference call with a key opinion leader on 19 September 2014, paragraph 10.

[146]       Minutes of a conference call with a key opinion leader on 19 September 2014, paragraph 11.

[147]       Minutes of a conference call with a key opinion leader on 19 September 2014, paragraph 11.

[148]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 93.

[149]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 93.

[150]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 94, minutes of a conference call  with  a  key  opinion
leader on 19 September 2014, paragraph.

[151]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 93.

[152]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Questions 94-95.

[153]       For instance, patency rate for Medtronic's DCB the 12 month patency  rate  was  83.7%  while  for  Covidien's  product  it  was  87%,
Covidien's device uses lower amount of paclitaxel for the same result, etc.

[154]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 72 and to Questionnaire  Q2  -  Competitors  peripheral
vascular devices, Question 42.

[155]       Response to RFI 7, question 12.

[156]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 89.

[157]       Medtronic formerly marketed In.PACT Amphirion, a below-the-knee product. However, the product has  been  withdrawn  from  the  market
following a failed trial.

[158]       Submission of 22 October 2014, Covidien document, p. 11.

[159]       Response to RFI 7 (revised), question 14.

[160]       Form CO, Annex 16, Stellarex Q2FY14, Franchise Review, p. 53.

[161]       Response to RFI 7 (revised), question 14.

[162]       Form CO, Annex 16, EU DCB, Covidien document, p. 15.

[163]       Submission of 22 October 2014, Covidien document, p. 11.

[164]       Form CO, Annex 16, Stellarex Q2FY14, Franchise Review, p. 8 and 53.

[165]       Form CO, Annex 16, Stellarex Q2FY14, p. 3.

[166]       Form CO, Annex 16, Stellarex Q2FY14, p. 27.

[167]       Submission of 22 October 2014, Covidien document, p. 25.

[168]       Submission of 22 October 2014, Covidien document, p. 57 and Marketing plan Covidien 2015.

[169]       Form CO, Table 59.

[170]       Replies to Questionnaire Q1 - Customers peripheral vascular  devices,  Questions  71  and  96  and  Replies  to  Questionnaire  Q2  -
Competitors peripheral vascular devices, Question 41.

[171]       Replies to Questionnaire Q1 - Customers peripheral vascular devices, Question 97.

[172]       Replies to Questionnaire Q2 - Competitors peripheral vascular devices, Question 56.

[173]       Form CO, paragraph 535.

[174]       Replies Questionnaire  Q3  –  Customers  electrosurgical  devices,  Questions  7-24  and   Replies  Questionnaire  Q4  -  Competitors
electrosurgical devices, Questions 5-27.

[175]       Replies Questionnaire Q4 - Competitors electrosurgical devices, Question 8 and 21.

[176]       Form CO, paragraph 539 and 555-576.

[177]       Form CO paragraph 545.

[178]       Replies to Questionnaire Q3 - Customers electrosurgical devices, Questions 8, 9, 15, 16; replies to Questionnaire  Q4  -  Competitors
electrosurgical devices, Questions 10 and 11; see also minutes of a conference call  with  a  customer  on  31  October  2014,  paragraph  7  "Le
PlasmaBlade est en revanche utilisé en cardiologie", Minutes of a conference call with a competitor on 4 November 2014,  paragraph  15  "ENT  and
plastic surgeons use this product [i.e. the PlasmaBlade]."

[179]       Replies to Questionnaire Q3 - Customers electrosurgical devices, Question 13.

[180]       Replies to Questionnaire Q4 - Competitors electrosurgical devices, Questions 12 and 13.

[181]       Replies to  Questionnaire  Q3  -  Customers  electrosurgical  devices,  Question  11;  replies  to  Questionnaire  Q4  -  Competitors
electrosurgical devices, Question 10.

[182]       Form CO, paragraph 585.

[183]       Form CO, paragraph 549.

[184]       Form CO, paragraph 548.

[185]       Replies to Questionnaire Q3 - Customers  electrosurgical  devices,  Questions  22-26;  replies  to  Questionnaire  Q4  -  Competitors
electrosurgical devices, Questions 17-27.

[186]       Case M.3687 Johnson & Johnson / Guidant, recitals 68-69; Case M.3146 Smith & Nephew / Centerpulse, paragraphs  15-16;  Case  M.  1286
Johnson & Johnson / DePuy, paragraphs 17-20.

[187]       Case M.3687 Johnson & Johnson / Guidant, recital 68.

[188]       Replies to Questionnaire Q3 - Customers  electrosurgical  devices,  Questions  25-27;  replies  to  Questionnaire  Q4  -  Competitors
electrosurgical devices, Questions 28-29.

[189]       Form CO, paragraphs 721 et seq.

[190]       Response to RFI 9, question 4.

[191]       If a narrower market for disposable electrosurgical pencils including PlasmaBlade is considered, the Parties' combined market  shares
would be 30% and the increment 2%.

[192]       The Notifying Party estimates that the size of the EEA LSC market is approximately EUR 55 million, RFI 10,  question  3.  Medtronic's
sales of LSCs were EUR […] million in 2014 and Covidien's sales EUR […] million in 2013.

[193]       Form CO, paragraph 684; response to RFI 11, question 6.

[194]       Covidien's Force Argon II has an average selling price of EUR [50-100], whereas Aquamantys is on average priced at approximately  EUR
[200-500].

[195]       Commission's Guidelines on the assessment of non-horizontal mergers under the Council Regulation on  the  control  of  concentrations
between undertakings (hereinafter "Non-horizontal merger guidelines"), paragraph 7.

[196]       Non-horizontal merger guidelines, paragraph 93.

[197]       Non-horizontal merger guidelines, paragraph 94.

[198]       Minutes of a conference call with a customer on the 31 October 2014, paragraph 11.

[199]       Minutes of a conference call with a competitor on 4 November 2014, paragraph 1; Minutes of a conference call with a competitor  on  4
November 2014, paragraphs 4 and 6.

[200]       The complainant considers that (i) RF bipolar devices are better at sealing and ultrasonic are better at dissecting, (ii) RF  bipolar
devices can be used for vessels up to 7mm while ultrasonic can only be used for vessels up to 3mm, (iii) RF bipolar devices do  not  retain  high
heat temperatures while ultrasonic become heat very quickly and retain high temperature, hindering their use in certain procedures and  (iv)  the
learning curve for RF bipolar devices is significantly lower than for ultrasonic.

[201]       Minutes of a conference call with a competitor on 4 November 2014, paragraph 15; Minutes of a conference call with a competitor on  5
November 2014, paragraph 6; Minutes of a conference call with a customer on the 31 October 2014, paragraph 1.

[202]       Minutes of a conference call with a customer on 31 October 2014, paragraph 6.

[203]       Minutes of a conference call with a competitor on 4 November 2014, paragraph 15.

[204]       Minutes of a conference call with a customer on 31 October 2014, paragraph 6; Minutes of a conference call with  a  competitor  on  4
November 2014, paragraph 15, Minutes of a conference call with a customer on 31 October 2014, paragraph 4.

[205]       Minutes of a conference call with a competitor on 3 November 2014, paragraph 12.

[206]       Minutes of a conference call with a competitor on 4 November 2014, paragraph 18; Minutes of a conference call with a customer  on  31
October 2014, paragraph 3; Minutes of a conference call with a customer on 31 October 2014, paragraph 1; Minutes of  a  conference  call  with  a
customer on 6 November 2014, paragraph 3.

[207]       As explained in Section IV.2.1. above, the market definition for electrosurgical devices  was  left  open.  The  vessel  sealing  and
dissection devices would be part of the narrower narrower market for advanced electrosurgical devices split by functionality.

[208]       The main competitors would be J&J/Ethicon with its Harmonic device, which operates with ultrasonic energy  ([30-40]%),  Olympus  with
Thunderbeat, a device combining both RF and ultrasonic energy ([10-20]%), ERBE ([5-10]%) and Aesculap ([0-5]%), Response to RFI 8, question  8.d.

[209]       Response to RFI 10, question 1.

[210]       Minutes of a conference call with a competitor on 4 November 2014, , [pic]!+,-/?@ABYZ[\]^_vwxyz{’“°ïèáÚÏÁ¹®¦®žšžÁ’ž‡{meÏ^WNht¹hj@ˆýÿ

h‰=€hAV…

h‰=€h 9nj

;h?Y  U[pic]jh?Y U[pic]mHnHu[pic]h?Y    jh?Y U[pic]ht¹Minutes of a conference call with a competitor on 4 November 2014, paragraph 6; Minutes  of
a conference call with a competitor on 4 November 2014, paragraph 12.

[211]       Response to RFI8, question 9.

[212]       Minutes of a conference call with a customer on 31 October 2014, paragraph 3; Minutes of a conference call with a customer on the  31
October 2014, paragraph 1; Minutes of a conference call with a competitor on 6 November 2014, paragraph 8.

[213]       Minutes of a conference call with a competitor on 3 November 2014, paragraph 12.

[214]       Minutes of a conference call with a competitor on 5 November 2014, paragraph 11-12.

[215]       Minutes of a conference call with a competitor on 5 November 2014, paragraph 8. Minutes of a conference call with a competitor  on  3
November 2014, paragraph 16.

[216]       Minutes of a conference call with a competitor on 5 November 2014, paragraphs 7-8; Minutes of a conference call with a competitor  on
5 November 2014, paragraph 6.

[217]       Annex X.8 of RFI 10 and response to RFI 10, question 8. The sale of laparoscopic kits corresponds to only 2.5%  of  Covidien's  total
sales.

[218]       Minutes of a conference call with a customer on 31 October 2014, paragraph 15; Minutes of a conference call with  a  customer  on  29
October 2014, paragraph 2; Minutes of a conference call with a customer on the 31 October 2014, paragraph 5; Minutes of a conference call with  a
customer on 31 October 2014, paragraph 9.

[219]       Medtronic's White Paper on conglomerate effects of 2 November 2014 and response to RFI11.

[220]       The Notifying Party submits that Plasmablade and Aquamantys are sold to only 4% of the hospitals, which purchase LigaSure and in  any
case to less than 1% of all EEA hospitals.

[221]       More than 80% of LigaSure's sales are done through tenders in a majority of European countries (in particular in the  UK,  Italy  and
Spain, which represent together more than 40% of LigaSure's sales in Europe), Bulgaria (65%), France (50%).

[222]       Austria, Belgium, Czech Republic, Germany, Hungary, Netherlands (tenders in less than 30% of the sales).

[223]       Moreover, the contribution of specialised personnel is required for the purchase of each type of devices. Depending on  the  function
of each device and the procedure for which it is used, different medical and  technical  staff  members  would  be  involved  in  the  purchasing
decision. Mirroring this, manufacturers' and distributors' sales forces are also specialised on certain types of  products  (e.g.  on  peripheral
vascular or electrosurgical devices). This way, they can approach and establish contacts with the  medical  and  technical  hospital  staff  that
would be involved in the sale of such products, present them their devices, educate them of their use etc.

[224]       Response to RFI 11, question 8.

[225]       Minutes of a conference call with a customer on 29 October 2014, paragraph 2; Minutes of a conference call with a customer on the  31
October 2014, paragraph 5.

[226]       Non-horizontal merger guidelines, paragraph 105.

[227]       This calculation includes the market for electrosurgical pencils and PlasmaBlade, however as explained above, PlasmaBlade is  a  much
more sophisticated device than a standard electrosurgical pencil, the value of the market for PlasmaBlade and Aquamantys  together  is  therefore
likely to be smaller.

[228]       LigaSure generates sales of EUR […] million in the EEA representing […]% of all  Covidien  sales  in  the  EEA.  In  a  few  European
countries, the sales of LigaSure represent more than […]% of Covidien's total  sales,  namely  Austria  ([…]%),  Finland  ([…]%),  Malta  ([…]%),
Portugal ([…]%) and Spain ([…]%).

[229]       LigaSure has sales of USD […] million, equal to approximately […]% of Covidien's global sales.

[230]       Sales of PlasmaBlade were less than EUR […] million in the EEA.

[231]       Sales of Aquamantys were less than EUR […] million in the EEA.

[232]       Non-horizontal merger guidelines, paragraph 107.

[233]       The unit margin for LigaSure ranges from EUR […] in Greece to EUR […] in Norway, whereas for  PlasmaBlade  it  is  from  EUR  […]  in
Croatia to EUR […] in the UK and for Aquamantys from EUR […] in Hungary to EUR […] in Belgium, Medtronic's White Paper  on  conglomerate  effects
of 2 November 2014.

[234]       Response to RFI 9, question 3.

[235]       Minutes of a conference call with a competitor on 5 November 2014, paragraph 13; Minutes of a conference call with  a  competitor  on
31 October 2014, paragraph 42; Minutes of a conference call with a competitor on 4 November 2014, paragraph 19;  Minutes  of  a  conference  call
with a customer on the 31 October 2014, paragraph 11.

[236]       Out of the total responses from customers and distributors on the issue, only in very few instances were  concerns  on  the  possible
effect of the Transaction on competition raised, mostly as a general comment of the reduction  of  competition,  the  negotiating  power  of  the
merged entity and the risk of price increases and cuts on innovation.

[237] Commission Notice on remedies acceptable under Council Regulation (EC) No  139/2004  and  under  Commission  Regulation  (EC)  No  802/2004
(2008/C 267/01), (the "Commission Notice on Remedies").

[238] Commission Notice on Remedies, paragraph 9.

[239] Commission Notice on Remedies, paragraph 12.

[240] Commission Notice on Remedies, paragraph 17.

[241] Commission Notice on Remedies, paragraph 23.

[242] Commission Notice on Remedies, paragraphs 25 and 26.

[243]       Replies to R1 - Market test of the Commitments, Question 3.

[244]       Replies to R1 - Market test of the Commitments, Question 8.

[245]       Replies to R1 - Market test of the Commitments, Question 9.

[246]       Replies to R1 - Market test of the Commitments, Question 14.

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 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE