CELEX: 32019M9331
Language: en
Date: 2019-12-18 00:00:00
Title: Commission Decision of 18/12/2019 declaring a concentration to be compatible with the common market (Case No COMP/M.9331 - DANAHER / GE HEALTHCARE LIFE SCIENCES BIOPHARMA) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 18.12.2019
                                                                C(2019) 9429 final
                                                                                 PUBLIC VERSION
                                                                 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                                                                 information omitted has been replaced by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.
                                                                To the notifying party
Subject:         Case M.9331 – DANAHER/GE HEALTHCARE LIFE SCIENCES
                 BIOPHARMA
                 Commission decision pursuant to Article 6(1)(b) in conjunction with
                 Article 6(2) of Council Regulation No 139/20041 and Article 57 of the
                 Agreement on the European Economic Area2
Dear Sir or Madam,
(1)       On 29 October 2019, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of the Merger Regulation by which Danaher
          Corporation (“Danaher”, United States) acquires sole control of GE Healthcare Life
          Sciences’ Biopharma Business (“GE Biopharma”, United States), within the
          meaning of Article 3(1)(b) of the Merger Regulation.3 Danaher is hereinafter
          referred to as “the Notifying Party”. Danaher and GE Biopharma are hereinafter
          collectively referred to as “the Parties”.
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    OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).
3    Publication in the Official Journal of the European Union No C 375, 6.11.2019, p. 28.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.      THE PARTIES, THE OPERATION AND THE CONCENTRATION
(2)     Danaher is the ultimate holding company of a group that designs, manufactures and
        markets professional, medical, industrial and commercial products and services. In
        the life sciences area, Danaher is primarily active through its wholly-owned
        subsidiaries Pall Corporation (“Pall”), Molecular Devices, L.L.C (“MolDev”), Leica
        Microsystems GmbH (“Leica”), Beckmann Coulter, IDBS, Integrated DNA
        Technologies, Phenomenex, Inc. (“Phenomenex”) and SCIEX.
(3)     GE Biopharma is part of General Electric’s (“GE”) Healthcare Life Sciences
        business unit. GE Biopharma supplies instruments, consumables and software for the
        research, discovery, process development and manufacturing workflows of
        biopharmaceutical drugs, such as monoclonal antibodies, vaccines, and cell and gene
        therapies. GE Biopharma is not organised as a separate stand-alone group of
        companies, but is held by different legal entities within GE.4 GE Biopharma
        comprises all properties, assets, goodwill and rights that relate primarily to the
        manufacture and distribution of instruments, consumables, and software that support
        the research, discovery, process development and manufacturing workflows of
        biopharmaceutical drugs and that are currently owned by GE, either directly or
        indirectly though GE’s subsidiaries.
(4)     On 25 February 2019, Danaher and GE entered into an Equity and Asset Purchase
        Agreement under which Danaher would acquire GE Biopharma by means of an
        acquisition of equity interests and assets for USD 21 400 million (EUR 18 100
        million) (the “Transaction”). Upon completion of the Transaction, Danaher would,
        either directly or indirectly own all equity interests and all assets belonging to GE
        Biopharma. Therefore, the Transaction constitutes a concentration pursuant to
        Article 3(1)(b) of the Merger Regulation.
2.      UNION DIMENSION
(5)     The combined aggregate turnover of the Parties is more than EUR 5 000 million
        (Danaher: EUR […] million; GE Biopharma: EUR […] million) and the aggregate
        Union-wide turnover of each of the Parties is more than EUR 250 million
        (Danaher: EUR […] million; GE Biopharma: EUR […] million). Neither of the
        Parties achieves more than two-thirds of their Union-wide turnovers within one and
        the same Member State. The Transaction therefore has a Union dimension pursuant
        to Article 1(2) of the Merger Regulation.
3.      COMMISSION’S APPROACH AND STRUCTURE OF THE COMMISSION’S ASSESSMENT
(6)     The Parties’ activities horizontally overlap in the manufacture and sale of various
        products and services used in the bioprocessing industries. Moreover, there are also
        some vertical links to be assessed between the Parties respective activities, as well as
        possible conglomerate effects. In section 4 of this decision, the Commission will
        firstly introduce the area of biologics and bioprocessing, followed by an assessment
        of possible horizontal non-coordinated effects in the various relevant markets, which
        form part of the bioprocessing workflow (section 4.2 to 4.7). Where relevant, the
4   The entities within GE Biopharma that are active in the affected markets in the EEA are: [...].
                                                          2
 ---pagebreak---         Commission        will    assess     possible       non-coordinated         vertical     effects
        (sections 4.2.1.2(B), 4.2.2.2(B) and 4.7.2.2) and possible coordinated effects in
        section 4.8. In section 4.9, the Commission will then assess possible conglomerate
        effects.
(7)     Moreover, the Parties’ activities horizontally overlap in the manufacture and supply
        of products and services which, while not directly forming part of the bioprocessing
        workflow, are closely related to this. In section 5, the Commission assesses possible
        horizontal non-coordinated effects in relation to the Parties’ activities in those other
        life sciences research segments, as well as possible coordinated effects.
(8)     Sections 7 and 8 will be dedicated to the Commission’s assessment of the
        Commitments offered by the Notifying Party.
4.      MARKET DEFINITION AND COMPETITIVE ASSESSMENT CONCERNING THE PARTIES’
        ACTIVITIES IN BIOPROCESSING
4.1.    Introduction
4.1.1. Biologics and bioprocessing
(9)     Bioprocessing is a broad term encompassing the research, development and, mainly,
        manufacturing of products prepared from or used by biological systems – namely,
        cells. Those products are known as biopharmaceuticals or biologics. Although cell-
        derived pharmaceutical products – such as vaccines and blood products – have long
        been used for therapeutic purposes, in the last two decades a new class of
        therapeutics has emerged that is based on proteins produced by genetically
        engineered living cells. New types of biologics include most notably monoclonal
        antibodies (“mAbs”). mAbs therapies were developed through a series of scientific
        advances since the 1980s, and currently are the largest product group within
        biologics. Most recent classes of biologics therapies are cell and gene therapy. In cell
        therapy, cells (for instance, stem cells) are injected in patients to treat a certain
        disease. In the gene therapy, faulty genes causing a disease are modified or
        inactivated. The latter can be performed by harvesting, curing and re-injecting the
        patient’s own cells, or by administering modified viruses (“viral vectors”) containing
        the corrected gene(s).
(10)    Although biologics are a relatively young class of therapies, their benefits have
        fuelled rapid growth. One report estimates that the biologics market was valued at
        approximately USD 255 000 million in 2017 and is expected to more than double
        by 2026.5 The development of biologics and in particular mAbs since the 1980s has
        also led to the emergence and growth of an industrial bioprocessing sector that
        supplies equipment and consumables to develop and manufacture biologics, which
        likewise has seen significant expansion. Its five-year expected annual growth rate is
        almost 9%.6
5   See the market report “Global Biologics Market Size, Market Share, Application Analysis, Regional
    Outlook, Growth Trends, Key Players, Competitive Strategies and Forecasts, 2018 to 2026”, April 2018,
    Acute Market Reports.
6   See the market report “Bioprocessing Technologies 2018, Market Analysis & Perspectives”, page 9,
    September 2018, SDi.
                                                      3
 ---pagebreak--- (11)   While the manufacturing process of biologics differs somewhat depending on the
       specific (type of) product, a typical and standardised process such as the one for
       mAbs begins with cell culture – growing cells within the laboratory – followed by a
       scale-up process in which the cell culture is grown to the levels required for
       manufacturing. After sufficient cell growth is achieved, the desired protein must be
       separated from the cells and the growth media purified. This involves various stages
       of filtering and clarification, as well as mixing the protein with sterile solutions at
       the desired level of dilution for administration to the patient.7
(12)   Bioprocessing can be divided into two broad manufacturing steps: an “upstream”
       process, during which cells are grown and the biologic target harvested, and a
       “downstream” process during which the desired drug product is isolated from the
       cells, purified and ultimately formulated and packaged into a final drug product –
       typically a filled vial or syringe.8
4.1.2. Customer preferences and regulatory constraints
(13)   Choices of bioprocessing consumables and hardware are often made at the early
       stages of the drug development process, based principally on technical
       considerations. A key feature of the industry is that biologics manufacturers must
       provide full characterisation of their products for regulatory approval. Such
       characterisation includes testing of the production process and its control.
(14)   In the Union, the European Medicines Agency (“EMA”) is responsible for central
       evaluation and authorisation of biologics (in EMA terminology, advanced therapy
       medicinal products or “ATMPs”). In addition to physicochemical testing, biologics
       require biological testing for full characterisation. Such characterisation combines
       testing of the active substance and the final medicinal product together with the
       production process and its control. Thus, the characterised and tested production
       process, which is designed by the manufacturer of the ATMP, becomes part of the
       basis for regulatory approval of the ATMP or biologic.
(15)   Thus, once regulatory approval to produce a new biologic using a defined
       manufacturing process has been obtained, and a manufacturer has selected a
       particular product for a step in this process, it often tries to avoid switching because
       doing so would require re-characterisation/recertification. It also appears that
       manufacturers typically do not qualify more than one product for the same use in a
       given production process, and that they are thus largely locked-in with their
       suppliers once the product decision has been made.
(16)   The Parties explain that it is typical for customers to select hardware and
       consumables from many different suppliers for a single bioprocessing setup. In light
       of the replies provided in the course of the market investigation, the Commission
       finds that customers appear in general to be able to “mix-and-match” equipment
       from different suppliers.9
(17)   It should be noted that a significant trend within bioprocessing – especially for
       commercial production – is the rapidly growing use of recently developed single-use
7   Form CO, paragraph 84.
8   Form CO, paragraph 85.
9   Questionnaire Q1, questions B.8 and B.9.
                                                  4
 ---pagebreak---        technology (“SUT”) products made of disposable plastic instead of conventional
       glass or stainless-steel vessels and tubings. SUT provide benefits in terms of lower
       initial investment cost, ease of use and flexibility, although consumables are more
       expensive. In particular, it appears that traditional steel hardware requires
       manufacturers to file with regulators a cleaning protocol, which they need to
       demonstrate ensures that there is no cross-contamination between product batches
       produced with the same hardware. Non-SUT also require the actual cleaning of
       hardware between production campaigns.
(18)   Another trend in bioprocessing appears to be that, while traditional biopharma
       manufacturing occurs through a “batch” process – with the raw materials used to
       create the biologic being processed as discrete quantities at each stage of
       manufacturing – there are emergent methods that involve continuous processing at
       least at certain stages.
4.1.3. Bioprocessing products
(19)   Bioprocessing technologies in manufacturing processes include both hardware and
       various types of consumables. Bioprocessing hardware includes equipment such as
       mixers, bioreactors, columns for housing the chromatography process and “skids” or
       “systems” that manage the flow of fluids being processed. Bioprocessing
       consumables, which account for the vast majority of sales in the industry, include a
       large number of products, such as cell culture media, chromatography resins or
       filters, offered by a broad range of suppliers.10
(20)   Pursuant to explanation of the Notifying Party,11 bioprocessing at the upstream level
       generally involves three types of technologies and related products: bioreactors;
       filtration equipment; and various mixing and storage instruments.
               Bioreactors are the key element of the upstream manufacturing process. They
                are vessels in which cells are grown in a controlled environment. Most
                commonly the cells are suspended in a liquid solution that is stirred or rocked
                to encourage cell growth.
               Filtration solutions are used at various stages of the upstream process to
                purify and clarify the cell growth solution and ensure its sterility before it is
                introduced into the bioreactor. The most prevalent type of filtration is direct
                flow filtration where a mixture flows through the filter. Another type of
                filtration is tangential flow filtration where the mixture flows alongside the
                filter.
               Mixers and storage instruments are used to prepare and store cell growth
                solutions. Mixers can also be used to mix other inputs, such as powders.
10  Form CO, paragraph 91.
11  Form CO, paragraphs 87 and 88.
                                                     5
 ---pagebreak--- (21)    Throughout the downstream manufacturing process, various types of equipment are
        used to separate unwanted (for example cell mass) from wanted (for example
        proteins) products of the upstream cell production process. The technologies
        generally fall into two areas:
                 Chromatography involves purification technologies that separate desired
                  from undesired elements through chemical processes by running a liquid
                  “mobile phase” through a “stationary phase” of chemically treated resins.
                 Filtration typically removes unwanted from wanted elements of the cell
                  growth process through physical separation by running liquids through
                  porous membranes.
(22)    The Commission’s assessment of the Parties’ activities in the bioprocessing industry
        will start with horizontal non-coordinated effects and vertical relationships
        concerning the upstream process followed by an assessment of the horizontal non-
        coordinated effects and vertical relationships between the Parties’ activities in the
        downstream process before moving to possible conglomerate and coordinated
        effects.
4.2.    SUT products
(23)    The Parties sell SUT bioreactors, mixers, connectors and bags for use in the
        upstream bioprocessing steps. The Parties consider each of these functions as
        different product markets.12 SUT products have consumable elements made of
        flexible or semi-rigid plastic. They are intended for one-time use and subsequent
        disposal, which improves safety and reduce cleaning and sterilisation costs. These
        consumables are designed to work only with the SUT hardware purchased from a
        given supplier. SUT products are growing rapidly in bioprocessing.
(24)    Bioreactors are vessels that create the appropriate environment through several
        conditions13 that enable cell culture growth for the purposes of producing biologics.
        The hardware part consists of a tank with a motor into which the bag is inserted and
        an automation and process control system, as well as sensors to control critical
        operating parameters, such as oxygen, pH, temperature and pressure, and mass flow
        controllers to regulate the gas flow into the bioreactor. The mixing technology may
        consist of a rocking platform (rocking bioreactor), a tank (stirred tank bioreactors) or
        a docking station and equipment to control sensors, mixing or gassing (fixed-bed
        bioreactor). The consumable part is the disposable plastic assemblies designed for
        specific hardware systems that contain the cells and cell culture media during cell
        growth.
(25)    SUT mixers are used to perform process steps such as preparing media and buffers,
        as well as virus inactivation. They are only used for mixing purposes. Most mixers
        consist of a sterile bag assembly containing a magnetically driven impeller supported
        by plastic or stainless-steel hardware.
12  In Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher
    Scientific/Patheon, the Commission considered a differentiation according to functions into bioreactors,
    bags, mixers, transfer assembles and other SUT products, but ultimately left open the exact product
    market definition.
13 Such as temperature, pH, oxygen, nutrient concentrations and removal of metabolic waste products.
                                                        6
 ---pagebreak--- (26)    SUT connectors allow to manage fluid between separate fluid pathways in the
        bioprocessing industry. SUT connectors have largely replaced traditional tube
        welding (that is joining two pieces of thermoplastic tubing by using high heat), as
        they provide a faster and easier solution. While it is not possible to use one
        supplier’s connector on one end with another supplier’s connector on the other end,
        they can be connected to the SUT system of a different supplier.
(27)    SUT bioprocess bags are used for the collection, storage, transport and feed-in of
        biopharmaceutical liquids in bioproduction processes.
(28)    The vast majority of customers and competitors14 who expressed an opinion in the
        market investigation on this point submitted that SUT bioreactors, SUT mixers and
        SUT connectors may be distinguished from each other based on their functions. As
        some market respondents stated:15 “they all have different functions which have
        different performance requirements, thereby making their classifications distinct”,
        “each product has its own use and can be use independently from each other. None
        can be replaced by another one” or “these products play different roles in
        bioprocessing and should therefore be distinguished from each other”.
(29)    In light of these considerations as well as all evidence available to it, the
        Commission will assess the different SUT product categories separately.
4.2.1. SUT bioreactors
4.2.1.1. Market definition
        (A)       Product market definition
        (A.i)     Notifying Party’s arguments
(30)    The Notifying Party submitted that (i) SUT rocking bioreactors; (ii) SUT stirred tank
        bioreactors; and (iii) SUT fixed-bed bioreactors belong to separate product
        markets.16 The Notifying Party provides a number of arguments in this regard:
        (a)     Rocking and stirred tank bioreactors would most commonly be used in
                suspension cell culture. Rocking and stirred tank bioreactors would be used at
                different stages of the bioprocess workflow17: whereas rocking bioreactors
                may be used as a seed train bioreactor for the stirred tank,18 stirred tank
                bioreactors are generally used for larger scale operations, such as
                development and production.
        (b)     Fixed-bed bioreactors would represent a niche that can only be used for
                adherent cell culture.19 The Notifying Party submits that the cases where
                either fixed-bed bioreactors or microcarriers in stirred tank bioreactors can be
                used interchangeably to grow adherent cells are limited to small-scale R&D
14  Questionnaire Q1, question E.B.2 and questionnaire Q3, question E.B.2.
15  Questionnaire Q1, question E.B.2.1 and questionnaire Q3, question E.B.2.1.
16  Form CO, paragraphs 809-810 and 816.
17  Form CO, paragraph 823.
18  Form CO, paragraph 820.
19  Form CO, paragraph 829.
                                                        7
 ---pagebreak---                  activities20 and to instances where customers are interested in what the cell
                 produces rather than in the cells themselves.21 While fixed-bed bioreactors
                 are not well suited for very large-scale cell culture, stirred tanks in
                 combination with microcarriers may be used for large-scale production of
                 vaccines.22
(31)    The Notifying Party submits that there is generally no substitution between SUT
        fermenters (vessels that used for the growth of microorganisms in non-mammalian
        microbial fermentation applications) and SUT bioreactors and therefore excludes the
        former from its proposed assessment.23
(32)    The Notifying Party considers that it is not necessary to distinguish between
        different sizes of SUT bioreactors because the size of the product is determined by
        the application it is used in and all suppliers generally offer a range of sizes and
        volumes to address these needs.24
(33)    The Notifying Party submits that markets should not be further segmented by types
        of customers because the majority of the SUT products are sold to bioprocessing
        with only a small part being sold to academia customers.25
(34)    The Notifying Party considers that it is not necessary to define a separate product
        market for the hardware (tanks and skids) used to hold and control the consumable
        part of SUT bioreactors.26 In this regard, the Notifying Party submits that the
        hardware and consumable parts are initially sold together as an SUT bioreactors and
        that a given supplier’s SUT bioreactor generally cannot be used with consumable
        SUT bioreactor bags supplied by another supplier.27
        (A.ii)     Commission’s assessment
(35)    In a previous decision28, the Commission left open whether SUT bioreactors, SUT
        bags, SUT mixers and SUT transfer sets constitute separate product markets or
        whether they belong to a single SUT product market. The Commission did not
        differentiate between different types of bioreactors in that decision.
(36)    A majority of customers who expressed an opinion in the market investigation on
        this point submitted that they are not generally able to use SUT rocking bioreactors,
        SUT stirred tank bioreactors and SUT fixed-bed bioreactors interchangeably or are
        only able to do so to a limited extent.29 In this regard, a customer submitted that
        “[e]ach type of SUT bioreactor have its own specification and range of use. [The
        respondent] choose the one that best fits the cultivation constrains imposed by the
        research project objectives. On very seldom occasion (once in 6 years), [the
20 Form CO, paragraph 831.
21 Form CO, paragraph 830.
22 Form CO, paragraph 833.
23 Form CO, paragraph 863.
24 Form CO, paragraphs 811-814.
25 Form CO, paragraph 815.
26 Form CO, paragraph 876.
27 Form CO, paragraph 877.
28 Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher Scientific/Patheon,
   recitals 21 and 23.
29 Questionnaire Q1, question E.B.A.1.
                                                    8
 ---pagebreak---       respondent] has hesitated between stirred tank and rocking bioreactor”.30 “[Stirred
      tank and rocking bioreactors] are used at different steps in the manufacturing
      process and are not interchangeable”.
(37)  Some customers referred to the size of the batch and the individual steps of the
      bioprocessing workflow as factors limiting the interchangeability between different
      types of SUT bioreactors. One customer submitted that “[r]ocking bioreactors are
      used in early steps to grow cells and are limited to a volume of 200 litres. On the
      other hand, stirred-tank bioreactors are used in the production phase; they are more
      advanced in their parameters and technical settings, and may be used with a volume
      of 1 500 - 2 000 litres. While technically both types of bioreactors could be used for
      the same purpose of growing cells, stirred-tanks bioreactors are generally too
      complex for smaller scale where rocking bioreactors can be used”.31 Another
      customer stated that “[d]ifferent bioreactors as listed above are best fit depending on
      the processes that you are running as well as the size of a batch that you need to do.
      For example, rocking bioreactors will be smaller and not able to handle cultures
      which are higher titer or require greater O2 control and/or consumption”. Another
      customer stated that “[these different types of bioreactors] have different functions at
      different scales and so in general are not interchangeable”. Another customer stated
      that these are “[u]sed for different volume and steps of the process”.
(38)  Other customers referred to the differences between suspension and adherent cell
      culture. In this regard, one customer stated that “[e]specially fixed-bed and stirred
      tank are not interchang[e]able for suspension cell cultures”.32 Another customer
      expressed that “[e]ach of the type of reactors quoted has a specific purpose in a
      production system, rocking systems are typically used in preculture applications.
      Stirred tank reactors are used in for production cultures, and fixed bed cultures are
      specific in their use with adherent cultures. None of these uses are interchangeable”.
(39)  Moreover, none of the competitors who expressed an opinion on this point indicated
      that customers are generally able to use these three types of SUT bioreactors
      interchangeably.33
(40)  In addition, a majority of customers who expressed an opinion in the market
      investigation on this point submitted that, for the specific purpose of growing
      adherent cell cultures, they are not generally able to use interchangeably fixed-bed
      bioreactors and rocking/stirred tank bioreactors in combination with microcarriers.34
      In this regard, a customer stated that “[f]or adherent cells, the Company uses
      (i) small culturing vessels or plastic pipes at an initial phase; (ii) Danaher’s fixed-
      bed bioreactors at an intermediate phase; and (iii) stirred-tank bioreactors in
      combination with microcarriers when a larger commercial-scale is required”.35
(41)  The Commission notes, based on the information provided by the Notifying Party,
      that a variety of suppliers offer SUT rocking bioreactors with working volumes
      between 1-5l and 25-50l and SUT stirred tank bioreactors with working volumes
30 Questionnaire Q1, question E.B.A.1.
31 Minutes of a call with a customer of 17 May 2019.
32 Questionnaire Q1, question E.B.A.1.
33 Questionnaire Q3, question E.B.A.1.
34 Questionnaire Q1, question E.B.A.2.
35 Minutes of a call with a customer of 17 May 2019.
                                                     9
 ---pagebreak---       between 1-5l and 2,000l.36 This has been confirmed by a majority of customers who
      expressed an opinion in the market investigation on this point, which consider that
      suppliers of SUT bioreactors have a credible offering of differently sized SUT
      bioreactors (from 1l to 2,000l) to address different needs.37 The response is however
      mixed within competitors.38
(42)  As to SUT fermenters, over the course of the market investigation, no market
      participant put forward any arguments in relation to a potential substitutability
      between SUT fermenters and SUT bioreactors.
(43)  For the purposes of this decision and in light of all information available to it, the
      Commission considers that (i) SUT rocking bioreactors; (ii) SUT stirred tank
      bioreactors; and (iii) SUT fixed-bed bioreactors constitute separate product markets,
      given that these three types of SUT bioreactors are mostly used at different stages of
      the bioprocess workflow and that they generally serve different applications.
      Moreover, the Commission does not consider necessary to further segment these
      product markets based on the size of the SUT bioreactor, since suppliers have a
      credible offering of differently sized bioreactors. The Commission does not consider
      it necessary to define a market for SUT fermenters as those are not relevant for the
      assessment of the Transaction.
      (B)        Geographic market definition
      (B.i)      Notifying Party’s arguments
(44)  The Notifying Party submitted that SUT bioreactors are worldwide and in any event,
      not narrower than EEA-wide in scope, as these products are manufactured at
      centralised sites and shipped via regional distribution hubs to customers globally.39
(45)  Moreover, the Notifying Party submitted that (i) transportation costs are low as a
      proportion of total costs, representing around […]% of the sales prices of SUT
      bioreactors; (ii) there are no regulatory differences within the EEA; (iii) custom
      duties do not affect transportation globally; and (iv) pricing is similar across the
      EEA.40
      (B.ii)     Commission’s assessment
(46)  The market investigation confirmed the Notifying Party’s submission regarding
      geographic market definition.
(47)  In relation to rocking bioreactors, stirred tank bioreactors and fixed-bed bioreactors,
      the large majority of customers and competitors who expressed an opinion on this
      point stated that (i) they procure SUT bioreactors at worldwide level; (ii) after-sale
      services are provided at worldwide level; (iii) prices are comparable at worldwide
      level; and (iv) the same suppliers are active at worldwide level.41
36 Form CO, tables 33 and 34.
37 Questionnaire Q1, question E.B.A.4.
38 Questionnaire Q3, question E.B.A.4.
39 Form CO, paragraph 881.
40 Form CO, paragraph 883.
41 Questionnaires Q1 and Q3, question E.C.A.1.
                                                 10
 ---pagebreak--- (48)     For the purposes of this decision, it can be left open whether the market for SUT
         rocking bioreactor, SUT stirred tank bioreactor and SUT fixed-bed bioreactors is
         global or EEA-wide in scope. The Transaction does not give rise to serious doubts as
         to their compatibility with the internal market or the functioning of the EEA
         Agreement under any of these plausible geographic market definitions.
4.2.1.2. Competitive assessment
         (A)       Horizontal overlaps
(49)     The Transaction leads to a horizontal overlap between the Parties’ offerings in SUT
         rocking bioreactors and SUT stirred tank bioreactors.
(50)     Danaher also offers its iCELLis SUT fixed-bed bioreactors, where GE is not
         active.42 Moreover, GE offers SUT fermenters, while Danaher does not. Given the
         absence of any horizontal overlap, SUT fixed-bed bioreactors and SUT fermenters
         will not be discussed further for the purpose of this decision.
         (A.i)     SUT rocking bioreactors
Table 1 – SUT rocking bioreactors – market shares in 2018
                                    Worldwide                                     EEA
                      Revenues (USD)       Market Share (%)        Revenues (USD)    Market Share (%)
 Danaher             […]                   [0-5]%                […]                [0-5]%
 GE                  […]                   [30-40]%              […]                [20-30]%
 Combined            […]                   [30-40]%              […]                [20-30]%
 Sartorius           […]                   [40-50]%              […]                [20-30]%
 Applikon            […]                   [5-10]%               […]                [5-10]%
 Thermo Fisher       […]                   [5-10]%               […]                [5-10]%
 Eppendorf           […]                   [0-5]%                […]                [5-10]%
 Other               […]                   [5-10]%               […]                [10-20]%
 Total               […]                   100%                  […]                100%
Source: Form CO
(51)     According to the Parties’ estimates set out in Table 1 above, the combined entity
         would hold a market share of [30-40]% (GE: [30-40]%; Danaher: [0-5]%) in a
         worldwide market for SUT rocking bioreactors. Following the Transaction, Sartorius
         will continue being the market leader with a market share of [40-50]%. Danaher
         would […] add a modest [0-5]% market share, and it is currently a smaller player in
         SUT rocking bioreactors than Applikon ([5-10]%), Thermo Fisher ([5-10]%) or
         Eppendorf ([0-5]%). Danaher’s small market share is due to it being a recent entrant
         in this market with only a small rocking bioreactor limited to 25L.
(52)     At the EEA-level, and according to the Parties’ estimates set out in Table 1 above,
         the combined entity would hold a market share of [20-30]% (GE: [20-30]%;
         Danaher: [0-5]%) for SUT rocking bioreactors. Following the Transaction, Sartorius
         will continue being the market leader with a market share of [20-30]%. Danaher
         would only add a modest [0-5]% market share, and it is currently a smaller player in
         SUT rocking bioreactors than Applikon ([5-10]%), Thermo Fisher ([5-10]%) or
         Eppendorf ([5-10]%).
42  The Parties are only active in SUT (non-conventional) bioreactors.
                                                        11
 ---pagebreak--- (53)  A large majority of customers who expressed an opinion in the market investigation
      on this point submitted that they would have credible alternative suppliers of SUT
      rocking bioreactors post-Transaction.43 In this regard, a customer stated that it
      “considers there to be sufficient competitors and options in this space. Post-
      Transaction, [the respondent] is comfortable that it will be able to find sufficient
      credible alternative suppliers of SUT bioreactors to the merged entity”. This view
      was unanimously backed by all competitors who expressed an opinion in the market
      investigation on this point.44
(54)  Moreover, the results of the market investigation indicated that GE and Danaher
      would not be close competitors in SUT rocking bioreactors. A clear majority of
      customers and competitors who expressed an opinion in the market investigation on
      this point considered that GE is the strongest player and that Sartorius is the second
      strongest player in this market.45
(55)  In addition, the replies from the market investigation confirmed the Notifying
      Party’s argument that GE’s and Sartorius’ strong position is due to the fact that they
      respectively acquired Wave Biotech LLC in 2007 and Wave Biotech AG in 2008,
      which resulted from the split of Wave Biotech, the inventor of SUT rocking
      bioreactors, into two companies.46 In this regard, a customer elaborated as to GE’s
      and Sartorius’ relative position in a market for SUT rocking bioreactors: “[t]he
      rocking bioreactor technology was developed by Wave Biotech over 20 years ago
      and subsequently acquired by GE. A European based copy of the same technology
      was purchased by Sartorius. These have been the dominant players in this market
      place”.47 This is consistent with the replies from competitors, who stated that
      “[s]trongest players were first to market with their SUT bioreactors” and that
      “Thermo has had a long-standing leadership in classical single-use bioreactors”.48
(56)  A majority of customers and competitors who expressed an opinion in the market
      investigation on this point does not expect an impact of the Transaction on price,
      quality, product range, innovation or security of supply.49
(57)  In light of the considerations in paragraphs (51) to (56) above as well as all evidence
      available to it, the Commission concludes that, in the worldwide or EEA-wide
      market for SUT rocking bioreactors, the Transaction will not give rise to serious
      doubts as to its compatibility with the internal market or the functioning of the EEA
      Agreement due to horizontal non-coordinated effects given in particular (i) the
      moderate combined share of the Parties; (ii) the small increment contributed by
      Danaher, which is a recent entrant to this market, to GE’s position; (iii) the fact that
      the parties are not close competitors to one another; and (iv) the presence of a strong
      competitor, Sartorius, matching the combined entity’s market shares.
43 Questionnaire Q1, question E.D.A.1.
44 Questionnaire Q3, question E.D.A.1.
45 Questionnaires Q1 and Q3, question E.D.A.2.
46 Form CO, paragraph 918.
47 Questionnaire Q1, question E.D.A.2.1.
48 Questionnaire Q3, question E.D.A.2.1.
49 Questionnaires Q1 and Q3, question E.D.A.4.
                                                12
 ---pagebreak---          (A.ii)    SUT stirred tank bioreactors
Table 2 – SUT stirred tank bioreactors – markets shares in 2018
                                  Worldwide                                EEA
                     Revenues (USD)     Market Share (%)    Revenues (USD)    Market Share (%)
 Danaher            […]                 [0-5]%             […]               [0-5]%
 GE                 […]                 [20-30]%           […]               [10-20]%
 Combined           […]                 [30-40]%           […]               [10-20]%
 Sartorius          […]                 [30-40]%           […]               [30-40]%
 Thermo Fisher      […]                 [30-40]%           […]               [30-40]%
 Eppendorf          […]                 [0-5]%             […]               [5-10]%
 Merck              […]                 [0-5]%             […]               [0-5]%
 ABEC               […]                 [0-5]%             […]               [0-5]%
 Other              […]                 [0-5]%             […]               [5-10]%
 Total              […]                 100%               […]               100%
Source: Form CO
(58)     According to the Parties’ estimates set out in Table 2 above, the combined entity
         would hold a market share of [30-40]% (GE: [20-30]%; Danaher: [0-5]%) in a
         worldwide market for SUT stirred tank bioreactors. Following the Transaction,
         Sartorius and Thermo Fisher will remain very similar in size to the combined entity,
         both with market shares of [30-40]%.
(59)     At the EEA-level, and according to the Parties’ estimates set out in Table 2 above,
         the combined entity would hold a market share of [10-20]% (GE: [10-20]%;
         Danaher: [0-5]%) for SUT stirred tank bioreactors. Following the Transaction,
         Sartorius and Thermo Fisher will continue being the market leaders, both with
         market shares of [30-40]%.
(60)     A large majority of customers who expressed an opinion in the market investigation
         on this point submitted that they would have credible alternative suppliers of SUT
         stirred tank bioreactors post-Transaction.50 This view was unanimously backed by
         all competitors who expressed an opinion in the market investigation on this point.51
(61)     Moreover, the results of the market investigation indicated that GE and Danaher
         would not be close competitors in SUT stirred tank bioreactors. Customers who
         expressed an opinion in the market investigation on this point were divided as to
         whether GE or Sartorius are the strongest player in SUT stirred tank bioreactors.52 A
         majority of competitors and a significant number of customers selected Thermo
         Fisher as the strongest player in this market.53 Very similar views on this point were
         expressed in relation to the second strongest player in SUT stirred tank bioreactors,
         with customers divided between GE and Sartorius.
(62)     A majority of customers and competitors who expressed an opinion in the market
         investigation on this point does not expect an impact of the Transaction on price,
         quality, product range, innovation or security of supply.54
50  Questionnaire Q1, question E.D.A.1.
51  Questionnaire Q3, question E.D.A.1.
52 Questionnaire Q1, question E.D.A.2.
53 Questionnaire Q1 and Q3, question E.D.A.2.
54 Questionnaires Q1 and Q3, question E.D.A.5.
                                                   13
 ---pagebreak--- (63)   In light of the considerations in paragraphs (58) to (62) above as well as all evidence
       available to it, the Commission concludes that, in the worldwide or EEA-wide
       market for SUT stirred tank bioreactors, the Transaction will not give rise to serious
       doubts as to its compatibility with the internal market or the functioning of the EEA
       Agreement due to horizontal non-coordinated effects given in particular (i) the
       moderate combined share of the Parties; (ii) the small increment contributed by
       Danaher to GE’s position; (iii) the fact that the Parties are not close competitors to
       one another; and (iv) the presence of two strong competitors, Sartorius and Thermo
       Fisher, matching the combined entity’s market shares.
       (B)        Vertical relationships
(64)   The Transaction leads to a vertical link between the upstream supply of direct flow
       filtration (“DFF”) consumables (described in detail in section 4.5) and the
       downstream supply of SUT rocking bioreactors and SUT stirred tank bioreactors.
       DFF consumables are generally used in SUT bioreactors, while tangential flow
       filtration (“TFF”) hollow fibre consumables are used in SUT bioreactors for
       perfusion applications.55
(65)   An internal email of Danaher identified […].56 […].57
(66)   The Notifying Party explains that “DFF filters used in bioreactors are always
       chosen by the manufacturer of the bioreactor to ensure that the overall
       specifications of the bioreactor are met”.58 While the Notifying Party recognises
       that, theoretically, DFF filters from other suppliers could be substituted, this would
       only be possible at the point of manufacture and would be expensive and time
       consuming, without adding any significant value to the customer. Because of this,
       the Notifying Party submits that “no bioreactor supplier offers customers the ability
       to customize the bioreactor bag with their DFF filter of choice because there is no
       customer demand for this”.59
(67)   Against this background, the Commission investigated whether the Transaction
       would lead to non-coordinated vertical effects in the form of input or customer
       foreclosure.
(68)   As regards a possible input foreclosure, the Commission assessed whether post-
       Transaction, the merged entity could restrict access to its DFF consumables or TFF
       hollow fibre consumables and thereby foreclose its competitors on the market for
       SUT bioreactors.
(69)   In this regard, the Commission firstly notes that as described in section 4.5, Pall sells
       DFF consumables and holds a market share of [20-30]% in the EEA and [30-40]% at
       the worldwide level. In turn, GE is active only […], with a […] market share of
       [0-5]% in both the EEA and worldwide level. Moreover, there are a number of
       credible competitors active in DFF consumables (see section 4.5.3.1) so that any
       attempt by the merged entity to foreclose access to its DFF consumables is likely to
55 RFI 8, question 7, annex DHR 566.
56 DHR 138.
57 RFI 5, question 25.
58 RFI 7, question 25.
59 RFI 7, question 25.
                                                 14
 ---pagebreak---       be defeated by its competitors in DFF consumables, such as Merck Millipore or
      Sartorius, who both have a broad portfolio of DFF solutions.60 Therefore, the
      Commission considers that the merged entity would not have a sufficiently strong
      market position in DFF consumables to engage in input foreclosure to the detriment
      of its competitors.
(70)  As regards TFF hollow fibre consumables, the Commission notes that while GE
      holds a strong position (see paragraph (264) below), […]. Thus, there is no merger-
      specific change as regards the future market position of the merged entity compared
      to GE’s current market position in TFF hollow fibre consumables. Against this
      background, the Commission considers it unlikely that the merged entity would
      engage in input foreclosure with respect to TFF hollow fibre consumables as a result
      of the Transaction.
(71)  As regards possible customer foreclosure, the Commission assessed whether the
      merged entity would have the ability to foreclose competing suppliers of DFF or
      TFF hollow fibre consumables from accessing customers.
(72)  In this context, the Commission firstly notes that bioprocessing filtration
      consumables such as DFF and TFF hollow fibre consumables are not only sold as an
      input for SUT bioreactors as part of the upstream process, but also on a stand-alone
      basis or together with hardware used in the downstream process. Thus, even if the
      merged entity could successfully retro-fit its own consumables into SUT rocking or
      SUT stirred-tank bioreactors, this would not impact on competitors’ sales of DFF
      and TFF hollow fibre consumable sales that are unconnected to bioreactors.
(73)  Secondly, the Commission notes that the merged entity’s market share in SUT
      rocking bioreactors would amount to [30-40]% at worldwide level and [20-30]% at
      EEA level. For SUT stirred tank bioreactors, the merged entity’s market share would
      amount to [30-40]% and [10-20]% respectively at worldwide and EEA level. This
      implies that a large part of SUT rocking and stirred tank bioreactors sales would not
      be affected by a possible retro-fitting strategy of the merged entity.
(74)  Thirdly, the Commission considers that any possible customer foreclosure strategy
      by the merged entity would also be limited by customer preferences. Contrary to the
      submission by the Notifying Party, a majority of customers who expressed an
      opinion in the market investigation on this point considers that they typically decide
      which DFF consumable is included in the SUT bioreactor, with a minority
      considering that the supplier of SUT bioreactors selects the DFF consumable to be
      used.61 In this regard, a customer stated that “[t]ypically, the relevant supplier of the
      bioreactor would recommend the DFF consumables that it normally offers (usually
      its own filters) but will always be willing to include a different filter if requested.
      While their own filter is likely the default, suppliers tend to be flexible following a
      request”.62
(75)  Therefore, the Commission considers that the merged entity would also lack the
      ability to foreclose competing suppliers of DFF and TFF hollow fibre consumables
      to access respective customers.
60 Form CO, paragraph 1325 and table 77.
61 Questionnaire Q1, question I.9.
62 Questionnaire Q1, question I.9.
                                                  15
 ---pagebreak--- (76)     In light of the considerations in paragraphs (64) to (75) above as well as all evidence
         available to it, the Commission concludes that, in the worldwide or EEA-wide
         market for SUT bioreactors and the worldwide or EEA-wide markets for DFF and
         TFF hollow fibre consumables, the Transaction will not give rise to serious doubts as
         to its compatibility with the internal market or the functioning of the EEA
         Agreement due to vertical non-coordinated effects.
4.2.2. SUT mixers and related IP
(77)     SUT mixers are used to perform process steps such as preparing media and other
         process liquids,63 as well as virus inactivation.64 SUT mixers make solutions by
         mixing various ingredients and cannot be used for adherent or suspension cell
         culture.65 Most mixers consist of a sterile bag assembly containing a magnetically
         driven impeller supported by plastic or stainless-steel hardware.66
4.2.2.1. Market definition
         (A)       Product market definition
         (A.i)     Notifying Party’s arguments
(78)     The Notifying Party submitted that it is not necessary to segment SUT mixers into
         various categories given that all suppliers offer all types of mixers and can provide a
         solution based on the user requirement specification of the customer.67
(79)     The Notifying Party considers that it is not necessary to define a separate product
         market for the hardware (tanks and skids) used to hold and control the consumable
         part of SUT mixers.68 In this regard, the Notifying Party submits that the hardware
         and consumable parts are initially sold together as an SUT mixer and that a given
         supplier’s SUT mixer generally cannot be used with consumable SUT mixer bags
         supplied by another supplier.69
(80)     The Notifying Party submitted that a further segmentation of the mixer portfolio
         could nevertheless be made based on the functionality that the mixer provides (that is
         pH or temperature control), and whether the mixers are locally controlled or
         connected to the customer’s automation systems.70 On this basis, it may be possible
         to identify the following sub-segments: (i) mixers with sensors; (ii) mixers with
         jackets; (iii) mixers with load cells; and (iv) mixers that are controlled locally or
         remotely.71
63  Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher Scientific/Patheon,
    recital 21.
64  Form CO, paragraph 766.
65  Form CO, paragraph 767.
66  Form CO, paragraph 768.
67  Form CO, paragraphs 872 and 875.
68  Form CO, paragraph 876.
69  Form CO, paragraph 877.
70  Form CO, paragraph 873.
71  Form CO, paragraph 874.
                                                     16
 ---pagebreak---         (A.ii)     Commission’s assessment
(81)    In a previous decision,72 the Commission left open whether SUT bioreactors, SUT
        bags, SUT mixers and SUT transfer sets constitute separate product markets or
        whether they belong to a single SUT product market. The Commission did not
        differentiate between different types of SUT mixers in that decision.
(82)    The market investigation in this decision has largely confirmed the Parties’
        submissions regarding product market definition.
(83)    A majority of customers and competitors who expressed an opinion in the market
        investigation on this point considered that SUT mixers should not be further
        segmented according to separate categories based, inter alia, on the different
        functionality they provide (namely, SUT mixers with sensors, SUT mixers with
        jackets, SUT mixers with load cells and SUT mixers that are controlled locally or
        remotely).73 In this regard, a customer expressed that “[t]he SU mixing is the main
        functionality and all the others are technical options that end users will request
        based on the specificities of their processes”. Another customer stated that it “often
        require[s] an SUT mixer to have sensors, load cells and jackets and be capable of
        being controlled locally and remotely. [The respondent] does not consider it makes
        sense to split SUT mixers by such categories given the requirement to mix and match
        functionality on a machine”. Moreover, a competitor expressed that “[a]ll these
        variants […] (as well as gas handling) exist and are used at times and not at other
        times and for various process steps”. This competitor moreover stated that “[i]n
        general, […] general mixers seems to be a reasonable split”.
(84)    Over the course of the pre-notification market investigation, it was put forward that
        an additional distinction could be made between top-mounted and bottom-mounted
        impeller mixers
(85)    A majority of those customers who expressed an opinion in the market investigation
        on this point considered that they were generally able to use top-mounted SUT
        impeller mixers for the same applications as for which bottom-mounted impeller
        mixers are used.74 In this regard, a customer expressed that “[t]he only difference
        between both options is purely operational and [that the] decision would be based
        on the clean room infrastructure where the SU mixing systems would be installed”.
        Another customer expressed that, “[i]n practice, [it has] used both top-mounted SUT
        impellers mi[x]ers and bottom-mounted impeller mixers for the same applications in
        the past. Ultimately, both function as mixers but with differing entry points. [The
        respondent] does not consider there to be a substantive difference between the two”.
        Another customer said that, “when designing a manufacturing process [they] would
        be able to select either a top- or bottom-mounted impeller mixer regardless of the
        product”.
(86)    Moreover, a majority of competitors who expressed an opinion in the market
        investigation on this point considered that customers are generally able to use top-
        mounted impellers for the same applications as for which bottom-mounted impeller
72 Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher Scientific/Patheon,
   recitals 21 and 23.
73 Questionnaires Q1 and Q3, question E.B.B.2.
74 Questionnaire Q1, question E.B.B.1.
                                                    17
 ---pagebreak---         mixers are used.75 In this regard, a competitor expressed that both types of impeller
        mixers are targeted towards “the same customers and the same applications. Top-
        mounted impellers have certain advantages, bottom-mounted have other advantages.
        It depends on the priorities of the customer regarding flexibility, openness, cleaning
        and other factors”.
(87)    For the purposes of this decision, in the light of all evidence available to it, the
        Commission considers that there is a single relevant market including all types of
        SUT mixers.
        (B)       Geographic market definition
        (B.i)     Notifying Party’s arguments
(88)    The Notifying Party submitted that SUT mixers are worldwide and in any event, not
        narrower than EEA-wide in scope, as these products are manufactured at centralised
        sites and shipped via regional distribution hubs to customers globally.76
(89)    Moreover, the Notifying Party submitted that (i) transportation costs are low as a
        proportion of total costs, representing around […]% of the sales prices of SUT
        mixers; (ii) there are no regulatory differences within the EEA; (iii) custom duties do
        not affect transportation globally; and (iv) pricing is similar across the EEA.77
        (B.ii)    Commission’s assessment
(90)    The market investigation confirmed the Notifying Party’s claims regarding
        geographic market definition.
(91)    The large majority of customers and competitors who expressed an opinion on this
        point stated that (i) they procure SUT mixers at worldwide level; (ii) after-sale
        services are provided at worldwide level; (iii) prices are comparable at worldwide
        level; and (iv) the same suppliers are active at worldwide level.78
(92)    For the purposes of this decision, it can be left open whether the market for SUT
        mixers is global or EEA-wide in scope. The Transaction does not give rise to serious
        doubts as to its compatibility with the internal market or the functioning of the EEA
        Agreement under any of these plausible geographic market definitions.
4.2.2.2. Competitive assessment
        (A)       Horizontal overlaps
(93)    In SUT mixers, the Transaction does not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement for
        the following reasons.
75  Questionnaire Q3, question E.B.B.1.
76  Form CO, paragraph 881.
77 Form CO, paragraph 883.
78 Questionnaires Q1 and Q3, question E.C.B.1.
                                                   18
 ---pagebreak--- Table 3 – SUT mixers – market shares in 2018
                                  Worldwide                                EEA
                      Revenues (USD)     Market Share (%)   Revenues (USD)    Market Share (%)
 Danaher            […]                  [20-30]%          […]               [20-30]%
 GE                 […]                  [10-20]%          […]               [0-5]%
 Combined           […]                  [30-40]%          […]               [20-30]%
 Thermo Fisher      […]                  [20-30]%          […]               [10-20]%
 Sartorius          […]                  [20-30]%          […]               [40-50]%
 Merck              […]                  [10-20]%          […]               [10-20]%
 Saint-Gobain       […]                  [0-5]%            […]               [0-5]%
 Total              […]                  100%              […]               100%
Source: Form CO
(94)     The combined entity will have moderate market shares at both the worldwide and the
         EEA-levels. As Table 3 shows, the Transaction will combine the current […] and
         […] players in the worldwide market for SUT mixers and will position the combined
         entity as the […] player in the market with a market share of [30-40]%. The
         combined entity will be closely followed by Thermo Fisher and Sartorius, which are
         roughly similar in size ([20-30]% and [20-30]% respectively). At the EEA-level,
         Sartorius will continue being the largest player in the market, with a market share
         of [40-50]%.
(95)     A majority of customers and all competitors who expressed an opinion in the market
         investigation on this point considered there will be credible alternative suppliers of
         SUT mixers post-Transaction.79
(96)     A majority of customers and competitors who expressed an opinion in the market
         investigation on this point considered Sartorius as the closest competitor to Danaher
         in SUT mixers.80
(97)     Moreover, a majority of customers and competitors who expressed an opinion on
         this point did not expect the Transaction to have a negative impact on price, quality,
         product range, innovation or security of supply.81
(98)     In light of the considerations in paragraphs (94) to (97) above as well as all evidence
         available to it, the Commission concludes that, in the worldwide or EEA-wide
         market for SUT mixers, the Transaction will not give rise to serious doubts as to its
         compatibility with the internal market or the functioning of the EEA Agreement due
         to horizontal non-coordinated effects.
         (B)       Vertical relationships
(99)     There is a vertical link between Danaher’s upstream licensing of intellectual property
         rights […] and the downstream supply of SUT mixers by its competitors.
(100) Danaher [Danaher’s intellectual property rights].82
(101) Currently, [Danaher’s intellectual property rights and license agreements].83
79  Questionnaires Q1 and Q3, question E.D.B.1.
80  Questionnaires Q1 and Q3, question E.D.B.2.
81 Questionnaires Q1 and Q3, question E.D.B.4.
82 Form CO, paragraphs 938 and 939.
                                                    19
 ---pagebreak--- (102) Moreover, [Danaher’s distribution agreements].84
(103) Against this background, the Commission investigated whether the Transaction
       would lead to non-coordinated vertical effects in the form of input foreclosure.
       Specifically, the Commission assessed whether post-Transaction, Danaher could
       restrict access to its intellectual property rights […] and thereby foreclose its
       competitors on the market for SUT mixers.
(104) In assessing the likelihood of an anticompetitive input foreclosure scenario, the
       Commission examines, first, whether the merged entity would have, post-merger, the
       ability to substantially foreclose access to inputs, second, whether it would have the
       incentive to do so, and third, whether a foreclosure strategy would have a significant
       detrimental effect on competition downstream. In practice, these factors are often
       examined together since they are closely intertwined.85
       (B.i)      Ability to foreclose
(105) In light of the fact that Danaher’s intellectual property rights […] are used by many
       manufacturers of SUT mixers, the Commission has firstly assessed whether Danaher
       would have the ability to restrict access to those rights.
(106) In this context, the Commission notes that [Danaher’s intellectual property rights].86
       According to the Notifying Party, [Danaher’s license agreements].87
(107) During the market investigation, all the companies currently licensing these
       intellectual property rights from Danaher have confirmed that the term of their
       licence agreements matches the duration of Danaher’s patent protection.88
(108) Moreover, the Commission notes that none of the concerned producers of SUT
       mixers considered that the Transaction or [Danaher’s intellectual property rights]
       will have an implication on their production of mixers for which they licence IP
       rights […].89
(109) As the existing licensing agreements cover a sufficient number of operators in the
       market, the Commission finds that Danaher would not have the ability to restrict
       access to its intellectual property rights […] post-Transaction.
       (B.ii)     Incentive to foreclose
(110) As regards a potential incentive for the merged entity to engage in input foreclosure,
       the Notifying Party submits that [Danaher’s intellectual property rights and license
       agreements].90
83 Form CO, paragraph 939.
84 Form CO, paragraph 939.
85 Commission Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the
   control of concentrations between undertakings, OJ C 265, 18.10.2008, p. 6, paragraph 32.
86 Form CO, paragraph 942.
87 Form CO, paragraphs 941 and 946.
88 Questionnaire Q3, question E.D.B.6.
89 Questionnaire Q3, questions E.D.B.7 and E.D.B.8.
90 Form CO, paragraph 946.
                                                       20
 ---pagebreak--- (111) The Commission notes that no competitor currently sourcing components from
       Danaher to be used in SUT mixers considers it likely that Danaher will restrict
       access to them post-Transaction.91 In this regard, a licensee stated that “Danaher is
       already supplying […] to competitors, the transaction will not change that
       competitive landscape, or their incentive to restrict access […]”.92
(112) In light of this and of the fact that Danaher is bound by the terms of existing licences
       for the life of the licenced patents, the Commission finds that Danaher would not
       have the incentive to restrict access to its intellectual property rights […] post-
       Transaction. In particular, the Transaction will not change the trade-off that Danaher
       already faces pre-Transaction between the profit that it could lose in the upstream
       market by engaging in an input foreclosure strategy and the potential profit gain
       from expanding its sales of SUT mixers downstream.
       (B.iii)    Impact
(113) Given the absence of the ability or the incentive to foreclose other manufacturers of
       SUT mixers, the Commission considers that the Transaction will not lead to
       increased prices in the downstream market thereby significantly impeding effective
       competition. In particular, the Commission has seen no evidence that a potential
       anticompetitive foreclosure would increase the cost of downstream competitors in
       the sale of SUT mixers nor raise the barriers to entry to potential competitors.
       Moreover, any potential input foreclosure would only affect part of a single market
       comprising all SUT mixers, as has been defined in paragraph (87) above, [Danaher’s
       intellectual property rights].
(114) Moreover, the Commission notes that, with the exception of one, all competitors in
       the downstream market also sell mixers that are not affected by Danaher’s
       intellectual property rights and would thus be in a position to offer SUT mixers even
       in the event of restricted access to Danaher’s intellectual property rights.93
       (B.iv)     Conclusion on vertical relationships
(115) In light of the considerations in paragraphs (99) to (114) above as well as all
       evidence available to it, the Commission concludes that, in the worldwide or EEA-
       wide market for SUT mixers, the Transaction will not give rise to serious doubts as
       to its compatibility with the internal market or the functioning of the EEA
       Agreement due to vertical non-coordinated effects.
4.2.3. SUT connectors
(116) SUT connectors provide reliable sterile connections between separate fluid
       pathways. They are used throughout single-use bioprocessing. Sterile connectors
       have largely displaced traditional tube welding as they provide faster and easier
       solutions to ensure a permanent connection.
(117) In upstream single-use bioprocessing, sterile connectors may be incorporated in SUT
       bioreactors to enable fluid transfer in or out, pH probe insertion, or sampling. They
       can also be incorporated in mixer bags to enable fluid transfer in or out of the mixer
91  Questionnaire Q3, question E.D.B.9.1.
92  Questionnaire Q3, question E.D.B.9.1.
93 Form CO, paragraph 939.
                                                  21
 ---pagebreak---          bag, or for pH/temperature probe insertion during media preparation. Sterile
         connectors are also key components of transfer sets, which enable the sterile transfer
         of fluid between unit operations. They can also be a component of an SUT bag, or
         part of a single-use filtration manifold.
(118) In downstream single-use bioprocessing, sterile connectors are used extensively in
         transfer sets to enable the sterile transfer of fluid from one bioprocessing unit
         operation to another. They can also be a component of an SUT bag or incorporated
         in a mixer, or for pH/temperature probe insertion during buffer preparation. Sterile
         connectors can also be a component of single-use filtration manifolds or single-use
         chromatography systems to enable the connection and transfer of fluid from one
         source through the inline device to another component such as an SUT bag.
(119) It is not possible to use one supplier’s connector on one end with another supplier’s
         connector on the other end. However, it is possible and common to integrate one
         supplier’s connectors in another supplier’s single use system according to the
         specifications of the customer.
4.2.3.1. Market definition
         (A)        Product market definition
         (A.i)      Notifying Party’s arguments
(120) The Notifying Party submits that gendered and genderless connectors94 compete on
         the same market, as they both offer the same applications and functionalities and are
         similar in price.95
(121) The Notifying Party submits that aseptic connectors may compete with sterile
         connectors96 in applications where sterile connections are not essential, but they
         generally do not compete where sterile connections are important, such as in the last
         steps of the downstream bioprocessing workflow, such as in filtration.97 The
         Notifying Party submits that sterile and aseptic connectors do not compete with
         quick connectors98 as they are intended for different applications. Quick connectors
         do not allow customers to maintain the cleanliness offered by sterile and aseptic
         connectors.99
94  SUT connectors may be gendered or genderless. Gendered connectors are provided as two different
    components (a male and a female component), which form a sterile connection when fitted together. In
    genderless connectors, a single component design fits together to form the sterile connection.
95  Form CO, paragraph 877.
96  Aseptic connectors provide aseptic connections for non-aseptic environments. Sterile connectors
    constitute a niche market within aseptic connectors, as they are certified for sterile connections and have
    undergone additional validation that aseptic connections do not have.
97  Form CO, paragraph 878.
98  Quick connectors allow for the connection and disconnection of fluid paths. As opposed to aseptic and
    sterile connectors, quick connectors do not allow customers to maintain the same cleanliness in their
    connections.
99  Form CO, paragraph 879.
                                                          22
 ---pagebreak--- (122) The Notifying Party provided market shares on the basis of a relevant product
         market comprising sterile and aseptic connectors (that is to say excluding quick
         connectors).100
         (A.ii)     Commission’s assessment
(123) In a previous decision101, the Commission left open whether SUT bioreactors, SUT
         bags, SUT mixers and SUT transfer sets constitute separate product markets or
         whether they belong to a single SUT product market. The Commission did
         differentiate between different types of SUT connectors in that decision.
(124) In this decision, a wide majority of customers who expressed an opinion in the
         market investigation on this point indicated that they can replace sterile genderless
         and sterile gendered SUT connectors as regards price, use applications, technical
         characteristics and efficiency.102 In this regard, a customer stated that “[e]ven though
         users usually prefer genderless connectors (they allow easier designs and better
         materials management), these should always be interchangeable with gendered
         ones, provided they are also validated by the drug manufacturer”. Another customer
         submitted that in its experience, “it is possible to replace a sterile genderless
         connector with a sterile gendered connector. The two connectors simply differ in
         their approach to connecting (genderless connectors involves identical connectors
         and gendered connectors require a female and male component) but otherwise,
         either can be utilised. Genderless is where the consoles are both identical at the
         end”.
(125) Moreover, competitors who expressed an opinion in the market investigation on this
         point have largely supported this view in relation to price, technical characteristics
         and efficiency.103 Responses where however mixed in relation to use applications. In
         this regard, a competitor pointed to certain limitations: “[the respondent] typically
         chooses between gendered connectors based on application. Genderless connectors
         are used for more generic, mass quantity production while gendered connectors are
         used for more customised production. Choice usually lies solely on what makes
         sense for the given design”.
(126) Competitors who expressed an opinion on this point in response to a request for
         information submitted that their customers may only replace a sterile connector by
         an aseptic connector in rare occasions. Some competitors stated that customers may
         move from connectors that are non-certified for sterile connections (that is aseptic)
         to those which are certified for this purpose, but not the other way around.104
(127) For the purposes of this decision, the Commission considers that the market for SUT
         connectors comprise both gendered and genderless connectors, as they generally
         serve the same applications in the bioprocess workflow. Given that the Transaction
         does not give rise to serious doubts as to its compatibility with the internal market or
         the functioning of the EEA Agreement in the market for SUT connectors, it can be
100 Form CO, paragraph 880.
101 Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher Scientific/Patheon,
    recitals 21 and 23.
102 Questionnaire Q1, question E.B.C.1.
103 Questionnaire Q3, question E.B.C.1.
104 RFI 16, question 2.
                                                     23
 ---pagebreak---         left open for the purposes of this decision whether SUT aseptic connectors and SUT
        sterile connectors belong to the same product market.
        (B)       Geographic market definition
        (B.i)     Notifying Party’s arguments
(128) The Notifying Party submitted that SUT connectors are worldwide and in any event,
        not narrower than EEA-wide in scope, as these products are manufactured at
        centralised sites and shipped via regional distribution hubs to customers globally.105
(129) Moreover, the Notifying Party submitted that (i) transportation costs are low as a
        proportion of total costs, representing around […]% of the sales prices of SUT
        connectors; (ii) there are no regulatory differences within the EEA; (iii) custom
        duties do not affect transportation globally; and (iv) pricing is similar across the
        EEA.106
        (B.ii)    Commission’s assessment
(130) The large majority of customers and competitors who expressed an opinion on this
        point stated that (i) they procure SUT connectors at worldwide level; (ii) after-sale
        services are provided at worldwide level; (iii) prices are comparable at worldwide
        level; and (iv) the same suppliers are active at worldwide level.107
(131) For the purposes of this decision, it can be left open whether the market for SUT
        connectors is global or EEA-wide in scope. The Transaction does not give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement under any of these plausible geographic market definitions.
4.2.3.2. Competitive assessment
(132) The Transaction leads to a horizontal overlap between the Parties’ offerings in SUT
        connectors. Danaher offers sterile SUT connectors (both gendered and genderless),
        through different generations of its Kleenpak connectors. GE only offers genderless
        aseptic SUT connectors, namely its ReadyMate connectors. Should SUT aseptic
        connectors and SUT sterile connectors be considered to belong to separate product
        markets, the Transaction would not lead to a horizontal overlap. For this reason, the
        assessment carried out in this section will be based on a market for overall SUT
        connectors.
105 Form CO, paragraph 881.
106 Form CO, paragraph 883.
107 Questionnaires Q1 and Q3, question E.C.C.1.
                                                   24
 ---pagebreak---           (A)        Market shares and market reconstruction
Table 4 – SUT connectors – market shares in 2018
                                   Worldwide                                       EEA
                       Revenues (USD)     Market Share (%)       Revenues (USD)         Market Share (%)
 Danaher              […]                 [20-30]%             […]                      [20-30]%
 GE                   […]                 [5-10]%              […]                      [0-5]%
 Combined             […]                 [20-30]%             […]                      [20-30]%
 Merck                […]                 [20-30]%             […]                      [30-40]%
 Sartorius            […]                 [20-30]%             […]                      [20-30]%
 Colder               […]                 [10-20]%             […]                      [10-20]%
 Saint-Gobain         […]                 [0-5]%               […]                      [5-10]%
 Refine Technology    […]                 [0-5]%               […]                      [0-5]%
 Total                […]                 100%                 […]                      100%
Source: Form CO
(133) According to the Parties’ estimates set out in Table 4 above, the combined entity
          would hold a market share of [20-30]% in a worldwide market for SUT connectors.
          At the EEA-level, the combined entity’s market shares would be of [20-30]%.
          According to these estimates, Merck would remain the market leader at both the
          worldwide and EEA levels (with market shares of [20-30]% and [30-40]%
          respectively), closely followed by Sartorius.
(134) During the market investigation, a number of elements suggested that the Parties’
          would hold higher combined market shares in a market for SUT connectors:
          (a)      First, ordinary course of business documents of Danaher suggest that the
                   combined entity would hold a combined market share of [50-60]% in a
                   worldwide market for SUT connectors in 2015, with GE bringing an
                   increment of [10-20]%.108 The Notifying Party has explained that the
                   estimates provided in the Form CO are more sophisticated than in this
                   internal document, given that the Form CO is based on customer replies and
                   relies on GE’s actual data.109
          (b)      Second, a number of competitors who expressed an opinion in the market
                   investigation on this point provided estimates of the combined entity’s
                   market shares in SUT connectors, which ranged between [40-50]% and
                   [60-70]% at the worldwide level, with an increment from GE ranging
                   between [10-20]% and [20-30]%.110
(135) In view of this discrepancy, the Commission carried out a market reconstruction
          based on actual sales figures of competitors in order to verify the position of the
          combined entity in a market encompassing all SUT connectors at the worldwide and
          EEA levels.111 The market reconstruction showed that the competitors’ actual sales
108 Form CO, annex DHR 148 “Baseball ABC 20181007”, slide 13.
109 Form CO, paragraph 956.
110 Questionnaire Q3, question E.D.C.1.
111 The Commission requested the Notifying Party’s competitors in SUT connectors to provide (i) their total
    worldwide sales (in thousand USD) of overall SUT connectors in 2018; (ii) their total worldwide sales (in
    thousand USD) of sterile-only connectors in 2018; and (iii) an explanation as to whether the figures
    provided were representative of the competitor’s total worldwide sales of SUT connectors in 2016
    and 2018. For the purpose of this request, the Commission followed a methodology consistent with the
    Parties’ approach. In particular, the Commission identified “overall SUT connectors” as comprising
    (i) both sterile and aseptic SUT connectors; (ii) both genderless and gendered SUT connectors; and
                                                        25
 ---pagebreak---           data was in fact much lower than what had been provided in the Form CO.
          According to the results of the market reconstruction, the combined entity would
          hold a market share of [30-40%].
          (B)       Limited potential entry of new suppliers
(136) A significant majority of customers who expressed an opinion in the market
          investigation on this point did not expect additional companies to start supplying
          SUT connectors in the next two to three years.112 A number of these customers
          pointed towards the existence of high barriers to entry, as newcomers are required to
          meet the quality and business requirements of mature pharmaceutical companies. In
          particular, one customer indicated that “[c]osts and scale of suppliers must be such
          that new companies coming to the market may not be easy to come by”.113 The view
          of competitors in this regard was mixed, with some competitors referring to this
          market as being “already occupied by clear market leaders, high technical and
          quality barriers to entry” and that, as such, “[a]ny new entrant would only be able to
          capture a very small market share”.114
          (C)       Credible alternatives suppliers
(137) A majority of customers and competitors who expressed an opinion in the market
          investigation on this point considered that, post-Transaction, there will be sufficient
          credible alternative suppliers of SUT connectors for new production processes prior
          to obtain regulatory approval of a biopharmaceutical.115
          (D)       Competitors’ expansion of capacity
(138) Several competitors that responded to a Commission’s request for information
          indicated that they currently have spare capacity for SUT connectors.116 Moreover,
          some of these competitors submitted that they would be able to increase their output
          of SUT connectors without incurring into additional high costs117 and that they have
          also plans for expanding their total capacity for SUT connectors in the coming
          year.118
(139) Moreover, one of these competitors indicated that a “significant increase in the price
          of the SUT competitor connectors” or “SUT competitor connector supply or quality
          issues” would trigger an expansion in capacity.119 An additional number of
          competitors referred in general to an increase in the demand for SUT connectors as a
          triggering factor for an expansion in total capacity.120
    (iii) exclusively stand-alone sales (that is excluding aseptic SUT connectors integrated into hardware, such
    as bioreactor or mixer systems).
112 Questionnaire Q1, question E.D.C.4.
113 Questionnaire Q1, question E.D.C.4.
114 Questionnaire Q3, question E.D.C.4.
115 Questionnaires Q1 and Q3, question E.D.C.2.
116 RFI 16, question 1.a.
117 RFI 16, question 1.b.
118 RFI 16, question 1.c.
119 RFI 16, question 1.e (non-confidential quotes).
120 RFI 16, question 1.e.
                                                            26
 ---pagebreak---         (E)        Closeness of competition
(140) The Notifying Party submitted that, while GE markets its SUT connectors as aseptic,
        Danaher offers only sterile certified SUT connectors. According to the Notifying
        Party, the difference in quality derived from the SUT connectors being aseptic or
        sterile is reflected in the sharp differences in the price of the Parties’ SUT
        connectors.121
(141) The views of competitors who expressed an opinion on this point in response to a
        Commission request for information support this argument. The respondents
        submitted that their customers are only able to replace a sterile connector by an
        aseptic connector in rare occasions: some customers may move from aseptic SUT
        connectors to certified sterile SUT connectors, but not the other way around.122
(142) Moreover, the Notifying Party submitted that […].123
Figure 1 – Overview of the main suppliers’ offering of SUT connectors (2000-2025)
[…]
Source: Form CO, Annex DHR 580
(143) In this regard, the Commission notes (as illustrated in Figure 1 above) that GE’s
        SUT connectors (ReadyMate) have been present in the market since before 2010. In
        turn, […]. Figure 1 above shows that the main competitors to the combined entity
        have recently introduced new models.
(144) This appears consistent with the […].124
        (F)        Conclusion
(145) While the Commission notes the discrepancy in market shares and also the responses
        of customers and competitors regarding the limited scope for potential entry of new
        suppliers in SUT connectors, further elements lead to the conclusion that the
        Transaction will not give rise to serious doubts, namely (i) the existence of credible
        alternative suppliers in the market; (ii) the fact that competitors currently have spare
        capacity and are able to increase output without incurring into additional high costs;
        and (iii) the fact that the Parties’ are not close competitors to one another.
(146) In light of the considerations in paragraphs (132) to (145) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or EEA-
        wide market for SUT connectors, the Transaction will not give rise to serious doubts
        as to its compatibility with the internal market or the functioning of the EEA
        Agreement due to horizontal non-coordinated effects.
121 Form CO, paragraphs 962 and 963 and Notifying Party’s letter of 20 November 2019. According to the
    figures provided by the Notifying Party, […].
122 RFI 16, question 2.
123 Notifying Party’s letter of 20 November 2019.
124 Danaher’s bidding data (M.9331 – Danaher GE Biopharma – SUT Connectors Win Loss Analysis,
    Doc ID277).
                                                     27
 ---pagebreak--- 4.3.     Cell culture media and sera
(147) Cell culture bioprocessing typically requires growing different types of cells.
         Nutrients are provided to cultivated cells in the form of media, sera and other
         reagents such as growth factors and hormones, which are consumables used in cell
         culture. Cell culture media are water-based liquids, while sera are liquid blood-based
         animal products.
(148) The Parties’ activities overlap in all three areas, namely cell culture media, cell
         culture sera and other process liquids but the Transaction gives rise to affected
         markets only in cell culture sera.
4.3.1. Product market definition
4.3.1.1. Commission’s precedents
(149) The Commission has examined cell culture sera in the past and, while the precise
         market definition was left opened, it considered that the market for cell culture sera
         could be segmented based on the customer groups, the type of animal the blood
         originates from, and the geographic origin of the blood provided.125
4.3.1.2. Notifying Party’s views
(150) In line with Commission’s precedents,126 the Notifying Party considers cell culture
         sera as a separate market within the overall cell culture segment. The Notifying Party
         further submits that cell culture sera could likely be segmented based on customer
         type, type of animal the blood originates from, and geographic origin of the blood
         provided. However, the precise product market definition was left open, since there
         would not be any competitive concerns under any such market definition.
4.3.1.3. Commission’s assessment
(151) The majority of customers and competitors who expressed an opinion on this point
         considered that the Commission’s past definitions for the relevant market in cell
         culture sera are still pertinent.127
(152) Therefore, for the purpose of this case, it can be left open whether there are relevant
         markets based on the different segmentations like the customer type, the type of
         animal that the blood originates from, or the geographic origin of the blood
         provided, as the transaction does not give rise to serious doubts as to its
         compatibility with the internal market or the functioning of the EEA Agreement
         under any of these plausible product market definitions128. Considering the overlaps
125 Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher Scientific/Patheon,
    recitals 12-16; Commission decision of 26 November 2013 in Case No COMP/M.6944 – Thermo Fisher
    Scientific/Life Technologies, recital 51; Commission decision of 15 June 2015 in Case No COMP/M.7435
    – Merck/Sigma-Aldrich, recitals 48-51.
126 Commission decision of 23 August 2017 in Case No COMP/M.8541 – Thermo Fisher Scientific/Patheon,
    recitals 12-16; Commission decision of 26 November 2013 in Case No COMP/M.6944 – Thermo Fisher
    Scientific/Life Technologies, recital 51; Commission decision of 15 June 2015 in Case No COMP/M.7435
    – Merck/Sigma-Aldrich, recitals 48-51.
127 Questionnaire Q1, question C.B.1 and questionnaire Q3, question C.B.1.
128 There are separate product markets for (i) overall cell culture sera; (ii) bioproduction customers and
    research customers; (iii) types of sera from different animals (FBS, calf, bovine, etc.); and (iv) geographic
    origins.
                                                           28
 ---pagebreak---         in the Parties’ activities, for the purpose of this decision, the Commission will carry
        out its competitive assessment only with regard to (i) overall cell culture sera; and
        (ii) Ultroser G serum substitute product markets.
4.3.2. Geographic market definition
4.3.2.1. Commission’s precedents
(153) In previous decisions, the Commission considered the geographic market for cell
        culture sera to be worldwide or at least EEA-wide in scope.129
4.3.2.2. Notifying Party’s views
(154) In line with past Commission previous definitions, the Notifying Party considers the
        geographic market for cell culture sera to be worldwide or at least EEA-wide in
        scope.
4.3.2.3. Commission’s assessment
(155) The majority of customers and competitors who expressed an opinion on this point
        tend to confirm the cell culture sera market to be worldwide. This is mainly due to
        comparable prices at a worldwide level, the fact that the same suppliers of sera are
        active at a worldwide level and that customers procure sera at a worldwide level.130
(156) In any event, for the purpose of this decision, the Commission considers that the
        precise geographic market definition can be left open, as this would not change the
        outcome of the competitive assessment.
4.3.3. Competitive assessment
(157) Danaher sources various media from Fujifilm and Stemcell Technologies and resells
        it for research stages of cell culture, under the under the MolDev brand. Also,
        Danaher offers a serum substitute (Ultroser G serum substitute) that can replace fetal
        calf serum (FCS) for small-scale experiments and diagnostic applications and
        reagents, buffers and solutions that are not used in cell culture. The serum is not
        suited for bioproduction, human, or animal use.
(158) GE Biopharma, under the HyClone product line, offers various cell culture
        consumables, for example media,131 sera, and other supplements, buffers and process
        liquids. GE Biopharma cell culture media and sera are predominantly used in the
        manufacturing stage of cell culture and, thus, supplied in high volumes.
(159) The Parties’ activities overlap in the overall sera market and in the possible market
        for Ultroser G serum substitute and fetal calf serum. The Transaction would lead to
        affected markets in the possible markets for overall cell culture sera and Ultroser G
        serum substitute at a worldwide level. However, in none of the possible affected
129 Commission decision of 26 November 2013 in Case No COMP/M.6944 – Thermo Fisher Scientific/Life
    Technologies, recitals 52-54.
130 Questionnaire Q1, question C.C.1 and questionnaire Q3, question C.C.1.
131 Cell culture media and other supplements, buffers and process liquids will not be further assessed in this
    chapter as the proposed transaction does not lead to affected markets, under any possible market
    definition.
                                                        29
 ---pagebreak---        markets, the Transaction raises serious doubts as to its compatibility with the internal
       market or the functioning of the EEA Agreement for the following reasons.
(160) First, according to the Parties’ estimates, in all affected markets, the combined
       market shares are […] ([20-30]%), with a […] increment from Danaher which is
       [0-5]%. The […] increment would not lead to a substantial change of the competitive
       structure of the market in any of the possible affected markets.
(161) Second, the combined entity will face several well-established suppliers post-
       Transaction, such as Thermo Fisher, Merck Millipore, Corning and other smaller
       ones.
(162) Third, the majority of customers and competitors who expressed an opinion in the
       market investigation on this point did not expect that the Transaction would have a
       negative impact in relation to cell culture sera regarding any of the following
       parameters: price, quality, innovation, security of supply and product range.132
(163) In light of the considerations in paragraphs (157) to (162) above as well as all
       evidence available to it, the Commission considers that, in the worldwide or EEA-
       wide market for cell culture sera and Ultroser G serum substitute, the Transaction
       will not give rise to serious doubts as to its compatibility with the internal market or
       the functioning of the EEA Agreement due to horizontal non-coordinated effects
       under any plausible market definition.
4.4.   Microcarriers
(164) Microcarriers are consumables used in cell culture bioprocessing. They provide a
       surface for the anchorage of adherent cells to attach and grow in cell culture vessels
       and bioreactors for adherent cell culture.
(165) Microcarriers consist of two parts: the core or matrix and the surface.
(166) The core or matrix of microcarriers can be of different porosity. Accordingly,
       microcarriers can be described as either microporous with pore sizes up to
       around 20 µm or as macroporous with pore diameters from around 20 µm up to
       around 400 µm. In a microporous structure, cells cannot enter the pores and thus
       grow in monolayers on the surface of the microcarrier. In a macroporous structure,
       cells can access the pores and grow inside the microcarrier in multilayers. As a
       general matter, microporous microcarriers may be used when the cell itself is the
       target product (for instance, in the manufacturing of stem cells), whereas
       macroporous microcarriers are mainly used when the cell secretes the target product
       (for instance, in the manufacturing of certain protein or viruses for vaccine
       manufacturing).
(167) The core material of microcarriers can be for example plastic (polystyrene), cotton
       (cellulose), protein (for example gelatin), or sugar (polysaccharide). The surface of
       microcarriers can be untreated or coated with proteins (collagen, recombinant
       proteins or synthetic peptides). The coating material is either animal-free or contains
       animal product (for example porcine collagen). Moreover, microcarriers can bear a
       positive charge (cationic) or different chemistries.
132 Questionnaire Q1, question C.D.1 and questionnaire Q3, question C.D.1.
                                                       30
 ---pagebreak--- 4.4.1. Market definition
(168) There are no precedents of the Commission concerning the product or geographic
        market definition in microcarriers.
4.4.1.1. Product market definition
        (A)       Notifying Party’s arguments
(169) The Notifying Party submits that microcarriers constitute a single overall product
        market.133 Within this overall product market, the Notifying Party considers that
        microcarriers can be differentiated between microporous and macroporous
        structures.134
(170) Moreover, the Notifying Party considers that a distinction may be drawn between
        microcarriers using animal-free components and microcarriers with animal-based
        components.135 Whereas some microcarrier customers are sensitive to the risk
        associated with animal component consumables, animal-free consumables do not
        raise the same concerns.
(171) Finally, the Notifying Party submits that industry reports may categorise
        microcarriers based on surface coating or surface modification, distinguishing
        untreated microcarriers, cationic microcarriers, collagen-coated microcarriers and
        protein-coated microcarriers (other than collagen). The Notifying Party submits that
        these attributes are not mutually exclusive and that they do not provide a meaningful
        basis for separate relevant product market definitions.
        (B)       Commission’s assessment
(172) A wide majority of customers who expressed an opinion in the market investigation
        on this point submitted that they cannot or they can only to a limited extent use
        microporous and macroporous microcarriers for the same applications.136 Likewise,
        no competitor has indicated during the market investigation that its customers are
        able to use both types of microcarriers for the same applications.137
(173) A wide majority of customers who expressed an opinion in the market investigation
        on this point were not able, or only able to a limited extent, to use animal-free and
        animal-based microcarriers for the same applications.138 In this regard, a customer
        indicated that “[a]nimal component-free microcarriers are generally regarded as
        preferable in the pharmaceutical manufacturing setting and we would never replace
        animal-free with animal-based microcarriers” (non-confidential). A large majority
        of competitors who expressed an opinion on this point took the same view.139
(174) A slight majority of customers who expressed an opinion on this point and a wide
        majority of competitors who expressed an opinion on this point considered that it is
133 Form CO, paragraph 487.
134 Form CO, paragraph 489.
135 Form CO, paragraph 491.
136 Questionnaire Q1, question D.B.1.
137 Questionnaire Q3, question D.B.1.
138 Questionnaire Q1, question D.B.2.
139 Questionnaire Q3, question D.B.2.
                                                  31
 ---pagebreak---         not possible to substitute between cationic microcarriers and collagen-coated
        microcarriers taking into consideration use applications, technical characteristics and
        efficiency.140 In this regard, one competitor stated that “[w]hile for performance
        testing purposes Sartorius cannot substitute between cationic microcarriers and
        collagen-coated microcarriers this may well not be the case for other applications”.
        While a majority of competitors who expressed an opinion on this point considered
        that it is possible to substitute between cationic microcarriers and collagen-coated
        microcarriers with regard to their price, the Commission takes the view that the
        limited substitutability in relation to use applications, technical characteristics and
        efficiency would suggest that these constitute separate product segments.
(175) Given that the Transaction gives rise to serious doubts as to its compatibility with the
        internal market and the functioning of the EEA Agreement in the market for
        microcarriers under any plausible product market definitions, it can be left open for
        the purposes of this decision whether there is a single relevant market comprising all
        types of microcarriers or whether further segmentations could be made based on (i)
        their porosity (between microporous and macroporous microcarriers); (ii) whether
        they use animal-free or animal-based components; or (iii) their surface coating
        (between cationic microcarriers and collagen-coated microcarriers).
4.4.1.2. Geographic market definition
        (A)       Notifying Party’s arguments
(176) The Notifying Party submits that the market for microcarriers is worldwide in scope
        and, in any event, not smaller than EEA-wide, given the low costs of transport and
        that microcarriers are produced in a limited number of sites for worldwide
        shipping.141
        (B)       Commission’s assessment
(177) A significant majority of customers who expressed an opinion in the market
        investigation on this point confirmed that they procure microcarriers at worldwide
        level; after-sale services are provided at worldwide level; prices are comparable at
        worldwide level; and the same suppliers are active at worldwide level.142
        Competitors have unanimously confirmed this view.143
(178) For the purpose of assessing this Transaction, the Commission considers that the
        market for microcarriers is worldwide in scope.
4.4.2. Competitive assessment
4.4.2.1. Notifying Party’s views
(179) The Notifying Party submits that the Transaction does not lead to a significant
        impediment of effective competition for microcarriers.144
140 Questionnaires Q1 and Q3, question D.B.3.
141 Form CO, paragraphs 505 to 507.
142 Questionnaire Q1, question D.C.1.
143 Questionnaire Q3, question D.C.1.
144 Form CO, paragraph 594.
                                                  32
 ---pagebreak--- (180) While the Notifying Party considers that GE is a supplier of microcarriers overall
         and in a potential sub-segment comprising microporous microcarriers, it submits that
         the Transaction will not change the competitive structure of the market.145 In this
         regard, the Notifying Party argues that the Transaction will combine GE with one of
         several similarly sized small competitors. It moreover argues that the Parties are not
         close competitors, given that (i) GE manufactures microcarriers mainly for large
         scale bioprocess applications and Danaher produces smaller-scale batches146; and
         (ii) while GE offers both microporous microcarriers and macroporous microcarriers
         with a polysaccharide core, Danaher offers only microporous microcarriers with a
         plastic core.147
(181) The Notifying Party argues that, given the absence of chance in the competitive
         structure of the market, the combined entity will continue to face significant
         competitive constraints by at least five credible and viable suppliers with higher or
         similar sales and market shares as Danaher, namely Corning, Fujifilm, Advanced
         Biomatrix, Percell and Global Cell Solutions.148
4.4.2.2. Commission’s assessment
(182) The Transaction leads to a horizontal overlap between the Parties’ offerings in
         microcarriers. Through Pall, Danaher offers its SoloHill microporous-only
         microcarriers, which have a plastic core and are supplied as animal-free or with
         animal components (collagen coating) that can also bear cationic charges. GE offers
         both microporous microcarriers (Cytodex) and macroporous microcarriers
         (Cytopore), with a sugar-based and a cotton-based core respectively. GE’s
         microcarriers are supplied with animal components as well as animal-free, that can
         also bear cationic charges. The Transaction does not lead to a horizontal overlap in
         relation to macroporous microcarriers.
Table 5 – Microcarriers – 2018
                                      Worldwide
                                             Market Share
                           Revenues (USD)
                                                  (%)
 Danaher                  […]              [5-10]%
 GE                       […]              [60-70]%
 Combined                 […]              [70-80]%
 Corning                  […]              [10-20]%
 Fujifilm                 […]              [5-10]%
 Percell                  […]              [5-10]%
 Global Cell Solutions    […]              [0-5]%
 Advanced Biomatrix       […]              [0-5]%
 Total                    […]              100%
Source: Form CO
(183) According to the Parties’ estimates set out in Table 5 above, the combined entity
         would hold a market share of [70-80]% (GE: [60-70]%; Danaher: [5-10]%) in a
         worldwide market comprising all types of microcarriers. The Transaction would
         reinforce GE’s current […] position in this market and would place the combined
145 Form CO, paragraph 596.
146 Form CO, paragraph 597.
147 Form CO, paragraph 615.
148 Form CO, paragraphs 596 and 608.
                                                   33
 ---pagebreak---          entity well ahead of Corning ([10-20]%), Percell ([5-10]%), Global Cell
         Solutions ([0-5]%) and Advanced Biomatrix ([0-5]%).
Table 6 – Microporous microcarriers – 2018
                                    Worldwide
                                            Market Share
                         Revenues (USD)
                                                 (%)
 Danaher                […]               [5-10]%
 GE                     […]               [60-70]%
 Combined               […]               [70-80]%
 Corning                […]               [10-20]%
 Fujifilm               […]               [5-10]%
 Global Cell Solutions  […]               [0-5]%
 Advanced Biomatrix     […]               [0-5]%
 Total                  […]               100%
Source: Form CO
(184) In a worldwide market comprising only microporous microcarriers, the combined
         entity would hold a market share of [70-80]%, as set out in Table 6 above. As in a
         market comprising all types of microcarriers, the Transaction would reinforce GE’s
         current […] position ahead of Corning ([10-20]%), Fujifilm ([5-10]%), Global Cell
         Solutions ([0-5]%) and Avanced Biomatrix ([0-5]%).
Table 7 – Animal-based microcarriers – 2018
                                    Worldwide
                                            Market Share
                         Revenues (USD)
                                                 (%)
 Danaher                […]               [10-20]%
 GE                     […]               [40-50]%
 Combined               […]               [60-70]%
 Other                  […]               [40-50]%
 Total                  […]               100%
Source: Form CO
(185) In a worldwide market comprising only animal microcarriers, the combined entity
         would hold a market share of [60-70]%, as set out in Table 7 above. On this basis,
         the Transaction would reinforce GE’s current […] position with an increment
         of [10-20]%.
Table 8 – Non-animal-based microcarriers – 2018
                                    Worldwide
                                            Market Share
                         Revenues (USD)
                                                 (%)
 Danaher                […]               [0-5]%
 GE                     […]               [70-80]%
 Combined               […]               [70-80]%
 Other                  […]               [20-30]%
 Total                  […]               100%
Source: Form CO
(186) In a worldwide market comprising only non-animal microcarriers, the combined
         entity would hold a market share of [70-80]%, as set out in Table 8 above. On this
         basis, the Transaction would reinforce GE’s current […] position with an increment
         of [0-5]%.
                                                  34
 ---pagebreak--- Table 9 – Cationic microcarriers and collagen-coated microcarriers – 2018149
                                                            Worldwide
                                        Cationic                               Collagen-coated
                                                Market Share                                Market Share
                          Revenues (USD)                             Revenues (USD)
                                                     (%)                                         (%)
 Danaher                 […]                  [5-10]%               […]                  [5-10]%
 GE                      […]                  [65-75]%              […]                  [65-75]%
 Combined                […]                  [70-80]%              […]                  [70-80]%
Source: Form CO
(187) In a worldwide market for cationic microcarriers as well as in such a market for
        collagen-coated microcarriers, the combined entity would hold a combined market
        share of [70-80]%, as set out in Table 9 above. On this basis, the Transaction would
        reinforce GE’s current […] position with an increment of [5-10]%.
(188) Contrary to the Notifying Parties’ arguments, the Parties appear to compete closely
        with each other in a market for overall microcarriers. A majority of customers and
        competitors who expressed an opinion in the market investigation on this point
        indicated that Danaher is the closest competitor to GE.150 […]151 […], as it shows
        that […]. In comparison, […].
(189) Moreover, customers appear to have limited possibilities of changing suppliers in
        this market. The views of customers who expressed an opinion in the market
        investigation on this point were mixed as to whether they will be able to find
        sufficient credible alternative suppliers of microcarriers post-Transaction.152 A
        majority of customers and all competitors who expressed an opinion on this point
        found at least some limitations in the number of credible alternatives for some use
        cases.153
(190) Furthermore, the market investigation suggested that entry of new competitors in this
        market is not likely. A majority of customers and competitors who expressed an
        opinion on this point does not expect additional companies to start supplying
        microcarriers in the next two to three years.154 Some competitors indicated that the
        market for microcarriers is characterised by high barriers to entry. In this regard, a
        competitor expressed the view that “[t]he extent of expertise, development, and
        testing required to gain meaningful adoption are high barriers to entry”.155 The
        Commission considers that the lack of expected entry of additional competitors
        would not pose a sufficient competitive constraint on the combined entity post-
        Transaction.
(191) While customers did not express concerns in relation to the impact of the
        Transaction, the views of competitors who expressed an opinion in the market
        investigation on this point were mixed (50-50%) on whether the Transaction will
149 The Notifying Party could only provide a rough estimate of the Parties’ market shares estimates for these
    segments/markets.
150 Questionnaires Q1 and Q3, question D.D.1.
151 […].
152 Questionnaire Q1, question D.D.2.
153 Questionnaires Q1 and Q3, question D.D.2.
154 Questionnaires Q1 and Q3, question D.D.3.
155 Questionnaire Q3, question D.D.3.
                                                       35
 ---pagebreak---        have an impact on price, product range or security of supply.156 While no competitor
       is concerned about a negative impact on the quality of microcarriers, a majority of
       competitors who expressed an opinion on this point expects a decrease in innovation.
       In this regard, a competitor stated that “[w]ith limited competition, price increases
       would be expected by the combined GE and Danaher offering, while security of
       supply would decrease given the combined entity’s control over the microcarrier
       market”.157
(192) In light of the considerations in paragraphs (182) to (191) above as well as all
       evidence available to it, the Commission concludes that, in the worldwide market for
       microcarriers (either overall, or in the potential market segments for microporous
       microcarriers, animal-based microcarriers, non-animal-based microcarriers, cationic
       microcarriers or collagen-coated microcarriers), the Transaction will give rise to
       serious doubts as to its compatibility with the internal market and the functioning of
       the EEA Agreement due to horizontal non-coordinated effects given in particular
       (i) the significant combined market share of the Parties; (ii) the meaningful
       increment contributed by Danaher to GE’s pre-existing leading position; (iii) the
       close competition between the Parties; and (iv) the lack of strong competitors or
       entry prospects.
4.5.   Bioprocess filtration
4.5.1. Introduction
(193) Bioprocess filtration constitutes a method for separating components based on size.
       It takes place at several steps in the bioprocessing production chain of the production
       of for instance mAbs, biologics used in cell and gene therapy, and vaccines.
       Different types of filtration are used depending on the production step and specific
       application.
(194) Similar as for other areas in the bioprocessing industry, it is for customers very
       difficult to change suppliers once a production process is in place and regulatory
       approval has been obtained, in particular where products are in contact with the
       molecule.158
(195) The Commission has not previously dealt with cases in the area of bioprocess
       filtration, and has therefore not previously assessed relevant markets in this area.
(196) Bioprocess filtration setups consist of systems (sometimes also referred to as
       ‘skids’), consumables, and equipment. Systems are used to control the filtration
       process and are composed of pumps, sensors, tubings, manifolds among other
       components. The filtration process is performed by filters (consumables) inserted
       into equipment (housing or holders that hold the equipment) that are deployed in the
       filtration system.
156 Questionnaires Q1 and Q3, question D.D.4.
157 Questionnaire Q3, question D.D.4.
158 Form CO, paragraphs 1572-1583.
                                                   36
 ---pagebreak--- Table 10 – Illustration of bioprocess filtration systems, consumables, and equipment
            System159                        Consumable160                    Equipment161
        TFF flat sheet system, SUT            TFF flat sheet cassettes    TFF flat sheet cassettes in holder
4.5.1.1. Direct flow filtration and tangential flow filtration
(197) There are two filtration techniques, direct flow filtration (“DFF”) and tangential flow
        filtration (“TFF”). In DFF, process fluids are passed directly through a membrane.
        This is generally used at stages of the bioprocessing work flow where the target
        product has to be separated from other particles based on size. In TFF, the process
        fluid flows in parallel to the membrane surface. TFF is typically used when the final
        product needs to be concentrated, or when the buffer in which the product is
        contained need to be exchanged. Both Parties are active in DFF and TFF.
(198) Figure 2 and Figure 3 below portray DFF and TFF techniques respectively,
        illustrating the manner in which the feed is passed through the membrane, and how
        the filtration flux rate varies according to the volume filtered.
Figure 2 – Direct flow filtration process
159 Form CO, figure 35.
160 Form CO, figure 46.
161 Form CO, figure 47.
                                                        37
 ---pagebreak--- Figure 3 – Tangential flow filtration process
(199) Figure 4 depicts the usage of bioprocess filtration in a generic production process for
        mAbs, which is one of the most common types of biopharmaceutical products. The
        figure indicates at which steps of the production whether DFF or TFF is used. The
        Parties submit that DFF and TFF cannot be interchanged (or when it is, it is
        application specific).162
Figure 4 – Usage of DFF / TFF in cell culture bioprocessing163
4.5.1.2. Different types of consumables used in bioprocessing filtration
(200) Different types of DFF filters include (i) pre-filters; (ii) sterile filters; (iii) depth
        filters; (iv) air/gas filters; and (v) virus filters.
162 Form CO, tables 67-69.
163 Form CO, figure 33.
                                                       38
 ---pagebreak--- (201) As regards TFF, there are two main technologies and corresponding consumables:
        TFF flat sheet and TFF hollow fibre. In flat sheets, the feed passes between sheets
        and the permeate is collected from the opposite side of the sheets, while in hollow
        fibre the feed passes through hollow fibres and the permeate is collected outside the
        fibres. These technologies result in different fluid dynamic characteristics. Figure 5
        and Figure 6 below portray diagrams of hollow fibre and flat sheet consumables
        respectively.
Figure 5 – Diagrams of a hollow fibre164
Figure 6 – Diagrams of a flat sheet165
4.5.2. Market definition
4.5.2.1. Product market definition
        (A)      Systems, equipment, and consumables
(202) The Notifying Party considers that systems, equipment and consumables constitute
        distinct product markets. First, these perform different functions in the filtration
        process. Consumables perform the actual filtering, while the equipment is used to
        support and host these consumables, and the system performs and steers the filtration
        process. Second, systems, equipment and consumables are generally sold separately
        and can often be mixed and matched between different suppliers. Systems of one
        supplier may be used with equipment and consumables from the same or other
        suppliers, because of standardisation in size, form and format (but not quality and
        performance) of consumables. Third, customers do not make a buying decision at the
        same moment but will at an earlier stage already decide the consumable needed for
        the production process before the system or equipment is chosen.
164 Form CO, figure 40.
165 Form CO, figure 41.
                                                  39
 ---pagebreak--- (203) The Commission notes that this claim is supported by the fact that there are suppliers
         that are active only in either systems, equipment or consumables. For instance, 3M is
         only active as a supplier of consumables, without offering systems or equipment; GE
         is active in systems and consumables, but only very limitedly in equipment; and
         YMC is only active in systems, but not in equipment or consumables.
(204) This is further confirmed by the market investigation, where customers
         predominantly indicate that they predominantly mix and match hardware and
         consumables from different suppliers.166167
(205) On this basis, the Commission considers that systems, equipment and consumables
         constitute distinct product markets.
         (B)        Consumables
         (B.i)      Notifying Party’s arguments
(206) The Notifying Party claims that customers’ choice between DFF or TFF is driven by
         technical requirements in the process, that there would be very little (if any)
         applications for which both DFF and TFF could be used.168 From a supply side
         perspective, there would be large differences in the production of DFF and TFF
         consumables and equipment, but not for systems. It therefore argues there to be
         distinct product markets for DFF and TFF consumables and equipment, but not for
         systems.
(207) As regards specifically DFF consumables, the Notifying Party indicates that the
         different types, namely (i) pre-filters; (ii) sterile filters; (iii) depth filters; (iv) air/gas
         filters; and (v) virus filters, are used for different purposes and are used for different
         applications. These segmentations might therefore potentially each constitute a
         distinct product market.
(208) As regards specifically TFF consumables, the Notifying Party submits that product
         and process needs determine whether one or the other technique and corresponding
         consumable has to be used. TFF hollow fibre and flat sheet consumables are used
         mainly in different applications. While both are capable of performing similar
         applications to some extent, there are many of such applications where one technique
         would be more effective or suitable than the other. Because of this, customers would
         have clear preferences for one over the other depending on the customer’s particular
         process and application needs.
(209) The Notifying Party submitted an overview of the advantages and constraints of each
         TFF technique (hollow fibre vs flat sheet), depending on the application, indicating
         where one technique would be preferred over the other.169 The Notifying Party
         indicates that each has a technical ‘sweet spot’ for a certain application, and that
         depending on the application, customer process requirements and a drug’s physical
166 Questionnaire Q1, question B.9.
167 In addition, a majority of customers seem to decide upon their choice of TFF skid at the clinical stage or
    later, while a majority of customers seem to decide upon their choice of TFF consumables before the
    clinical stage. Questionnaire Q1, question B.7).
168 Form CO, annex 57.
169 Form CO, tables 71, 72 and 73.
                                                        40
 ---pagebreak---        characteristics (that is to say the target molecule) gives one technique advantages
       over the other.
(210) Typically, TFF steps upstream in the production process use hollow fibre
       consumables, while those downstream use flat sheet consumables.
(211) Furthermore, the production of equipment and consumables of these technologies
       would be highly specific and different. Suppliers of hollow fibre consumables and
       equipment would not be able to easily switch to the production of flat sheet
       consumables and equipment in case of a relative price increase, and vice versa.
       Therefore, the Parties consider that TFF hollow fibre and flat sheet consumables
       constitute two separate product markets.
       (B.ii)     Commission’s assessment
(212) As regards consumables used for bioprocessing filtration, the market investigation
       showed that customers do not use DFF and TFF filtration techniques and respective
       consumables for the same purposes. Customers explain: “DFF and TFF are used for
       different purposes in a protein purification process. They are rarely interchangeable
       although each type of products from different vendors are often interchangeable for
       a specific application (i.e. a different DFF filter may replace the existing DFF filter
       in use, and same for TFF)”;”DFF (direct or normal flow) and TFF (tangential or
       “cross-flow”) tend to be used to for different purposes. They are different
       technology and they involve the performance of different process. As a result of the
       differing operational performance, [Company] considers that DFF and TFF are
       generally not able to be used for the same applications”; “[d]ifference in surface
       layer formation between the two process forms”.170
(213) As regards specifically consumables for DFF, the Commission notes that GE’s
       activities […]. It is active only as […] of specific categories of DFF consumables
       (pre-filters and sterile filters). If these were to constitute distinct relevant product
       markets, affected markets would arise, but with only a […] increment from GE’s
       activities (between [0-5]% and [0-5]% on a worldwide and EEA level). For these
       reasons, the Commission does not further assess these segments and leaves open
       whether these would constitute distinct relevant product markets.
(214) As regards specifically consumables for TFF, the market investigation showed that
       customers do not use flat sheet and hollow fibre filtration for the same applications,
       or only limitedly. Customers explain: “[w]e use both and while they can be
       interchanged to an extent, the availability of various membranes at different sizes for
       different scales means we are limited in how much cross over we can exploit. Also
       product specific characteristics cause certain filter types to be unsuitable”; “[i]n
       process applications, they are rarely in competition with each other. TFF
       hollowfibre is used in 2 important niche applications – cell culture perfusion and
       harvest and virus removal applications. The vast bulk of the remaining TFF
       applications use flat-sheet style membrane devices”; “[t]he TFF flat sheet and TFF
       hollow fibre filtration utilize different mechanics depending on the application;
       accordingly, it is not practical to use these for the same applications”; “[u]sed for
       different purposes (higher through put, etc)”. A smaller minority however does
       consider these interchangeable: “[… f]rom [customer name]’s perspective, TFF
170 Questionnaire Q1, questions G.B.1 and G.B.1.1.
                                                   41
 ---pagebreak---        hollow fibre filtration is simply a more modern version of the TFF flat sheet but both
       ultimately produce similar results”.171
(215) As to supply-side substitutability between different types of bioprocessing filtration
       consumables, the results of the market investigation do not contradict this. One
       competitor for instance indicates: “[t]he barriers to introducing a new TFF cassette
       are mostly a long ROI, as swapping a cassette in an existing process would be very
       difficult, so you would need to specific at Clinical phase 1 and grow with the
       process. This could take 5+ years before you are in manufacturing and seeing any
       ROI. In the meantime you would incur all the costs of manufacturing supporting and
       validating the device”.172
(216) On this basis, the Commission considers it likely that there are separate product
       markets for each consumable (DFF, flat sheet and hollow fibre TFF). In any event,
       this can be left open as the Transaction will not raise serious doubts as to its
       compatibility with the internal market or the functioning of the EEA Agreement in
       the area of consumables in either an overall market for consumables or segmented by
       technology (DFF, flat sheet, hollow fibre TFF).
       (C)        Systems
       (C.i)      Notifying Party’s arguments
(217) The Notifying Party argues that there is an overall market for bioprocessing filtration
       systems encompassing DFF, as well as TFF hollow fibre and TFF flat sheet systems,
       although DFF and TFF systems might also belong to two different markets.173
(218) It explains that bioprocessing filtration systems are composed of the same
       components, including for example pumps and valves, but that the difference is
       mainly driven by the way the feed stream flows, leading to different system designs
       and set-ups. DFF systems for instance only need a pump and pressure sensors to
       monitor the filtration process, while TFF systems require more complex
       functionalities. Because of this, in the Notifying Party’s view DFF systems generally
       do not work with TFF consumables. TFF systems would also not work with DFF
       consumables, because of ‘differences in control functionalities and the geometry for
       the pipe arrangement’.174
(219) However, the production process of TFF systems and DFF systems would be the
       same in terms of engineering practices and capabilities. In that regard, the Notifying
       Party submits that it is possible for one supplier producing a particular system to
       build another type of system within a time frame of approximately […]. Switching
       costs would amount to around USD […]. Nonetheless, the Notifying Party also
       stresses the importance for a supplier to have experience and reputation in order to
       start producing a different type of filtration system.
(220) In addition, the Notifying Party submits that there are existing systems that are able
       to use both hollow fibre and flat sheet TFF consumables, or both TFF and DFF
171 Questionnaire Q1, questions G.B.2 and G.B.2.1.
172 Questionnaire Q3, question G.B.13.
173 Form CO, paragraph 1292.
174 Form CO, paragraphs 1211-1213.
                                                   42
 ---pagebreak---         consumables. The Notifying Party in that regard submits an example of GE’s Äkta
        readyflux. At the same time, [use of Äkta readyflux by GE].
(221) As regards specifically TFF systems, the Notifying Party submits additional
        arguments that would show supply-side substitutability between TFF hollow fibre
        and TFF flat sheet systems.
(222) In that regard, it would be possible to modify a flat sheet TFF system to work with
        hollow fibre consumables. Such modification would take a [timeframe] and would
        cost under USD […].175 The opposite modification for a hollow fibre TFF system to
        work with flat sheet consumables would be possible in [timeframe] with an
        investment of about USD […].
(223) As an illustration for there being little engineering differences, the Notifying Party
        refers to the possibility to use both hollow fibre and flat sheet consumables with a
        number of GE’s TFF systems. For these systems, customers would only have to
        purchase appropriate accessories and set the appropriate flow rate on the system for
        it to work with either hollow fibre or flat sheet. Similarly, the Notifying Party claims
        that Repligen and LEWA/YMC would also market and sell TFF systems compatible
        with both types of consumables.
(224) The Notifying Party further indicates that TFF systems are typically heavily
        customised (instead of being “off the shelf”), and that a custom system typically take
        [timeframe] to design and deliver, or up to [timeframe] including installation at the
        customer’s site. This time for a supplier to deliver a custom system would be the
        same regardless of whether the system is for use with flat sheet or hollow fibre
        consumables, and irrespective of whether it is supplied by a system supplier active
        only in flat sheet, hollow fibre, or both. Therefore, the Notifying Party considers that
        the test for supply-side substitutability is met, as the condition for supply-side
        substitutability to occur ‘in the short term’176 has to be seen in light of these general
        industry characteristics (in particular, the prevalence of long lead times).
(225) Lead times for a standard (“off the shelf”) system would be significantly shorter,
        namely [timeframe]. To design, test, validate and commercialise a new standard
        system would however take [timeframe]. Nonetheless, the Notifying Party indicates
        that […]% of Danaher’s TFF system sales are for custom systems or customised ‘to
        at least some extent’’ (indicating that […] are purely custom). In hollow fibre
        systems, it only offers custom systems and has no standard systems in its portfolio.
        GE estimates that […]% of its TFF system sales in 2018 were custom.
175 Though the particular example given by the Notifying Party appears to only refer to a SUT system (Form
    CO, paragraph 1245).
176 Commission Notice on the definition of relevant market for the purposes of Community competition law,
    OJ C 372, 9.12.1997, p. 5-13, paragraph 20.
                                                       43
 ---pagebreak---         (C.ii)     Commission’s assessment
        (C.ii.a) Demand-side substitutability
(226) The Commission notes that the Notifying Party does not contest that customers
        generally177 cannot use systems for DFF, and TFF hollow fibre and TFF flat sheet
        interchangeably.
(227) In terms of demand-side substitutability between systems used for DFF and flat sheet
        and hollow fibre TFF, as indicated in paragraphs (212) and (214), the market
        investigation showed that customers do not use DFF, flat sheet and hollow fibre TFF
        filtration for the same applications, or only in a limited way. In that regard, the
        Commission understands that different systems are generally used for each of these
        filtration techniques. In light of the foregoing, the Commission considers that, from a
        demand-side perspective, customers are generally not able to substitute between DFF
        and TFF systems. As regards, hollow fibre and flat sheet TFF systems, the market
        investigation is inconclusive. However, concerning the Notifying Party’s arguments
        relating to existing supply-side substitutability, the Commission observes the
        following:
        (C.ii.b) Supply-side substitutability
(228) With respect to supply-side substitutability, the Commission assessed (i) the
        competitive landscape for DFF, flat sheet and hollow fibre TFF consumables, (ii) the
        extent to which there are systems today that can process all (or some) of these
        consumables, (iii) to what extent suppliers that are not yet active in systems for a
        particular consumable can design and supply such a system from scratch.
                a.    Competitive landscape
(229) The Commission first notes that the competitive landscape for DFF and TFF systems
        differs significantly. While Danaher has a sizeable position in DFF, GE is hardly
        present. Competitors in DFF are not identical to those active in TFF and generally
        hold a stronger position than those active in TFF. In TFF, Danaher holds a sizeable
        position and GE has a stronger presence than in DFF. Moreover, one of the main
        competitors in TFF, namely Repligen, is not active in DFF. Similarly, the Parties’
        largest competitors in flat sheet systems are not present in hollow fibre systems,
        while Repligen, the largest competitor in hollow fibre systems is not present in flat
        sheet systems. This can be seen as a first indication of the absence of supply-side
        substitutability.
                b.    Multi-functional systems
(230) Secondly, the Commission investigated to what extent systems, beyond those of the
        Parties, are today able to work with both DFF, flat sheet and hollow fibre TFF
        consumables.
(231) In the market investigation, a large minority of customers who expressed an opinion
        on this point (21 out of 46) indicated that skids can generally only work with one
177 Pursuant to the Notifying Party, GE’s Äkta readyflux skid constitutes a notable exception in as far as it
    can be used with both hollow fibre and flat sheet consumables, and to some extent with DFF consumables
    when used with supporting flow kits.
                                                         44
 ---pagebreak---          type of consumable, while others (14 out of 46) say that skids are generally able to
         work with flat sheet and hollow fibre TFF but not with DFF consumables and yet
         others (11 out of 46) say that skids are generally able to work with all types of
         consumables.178
(232) In that regard, the Commission notes that GE’s Äkta readyflux systems can be used
         for both consumables. However, it is unclear to what extent there are other systems
         that can also work with both. In this regard, the Notifying Party provided a link to
         Repligen and YMC’s websites where, according to it, it is indicated that they offer
         systems for both hollow fibre and flat sheet. The Commission however observes that
         the reference is unclear as to whether this would entail a single device that can work
         with both consumables, or whether these companies’ product portfolio would
         contain both systems for hollow fibre and systems for flat sheet consumables (that is,
         as individual devices).179 Similarly, the other competitors’ websites referred to by
         the Notifying Party in the Form CO did not indicate that their systems would process
         both types of consumables.180 Repligen’s website indicates that it provides certain
         TFF skids within its product portfolio that would be compatible with both flat sheet
         and hollow fibre consumables.181 To request a quote on the respective devices
         however, customers are referred to a different link depending on the choice for flat
         sheet or hollow fibre filters. This would indicate that modifications or adaptations
         might be needed. Furthermore, these devices seem also limited to lab and pilot scale
         production scales.
(233) Further, while the Parties indicated that GE’s skid can also work with both DFF and
         TFF consumables, they also indicate that this system [use of GE’s systems]. The fact
         that TFF skids are more sophisticated is also reflected by comments made in the
         market investigation, for instance: “TFF is a more complex and time-consuming unit
         operation than with DFF. As such the required equipment is also necessarily more
         complex with more ability to control / modulate the process. […]”. The Commission
         in this regard questions the relevance of responses in the market investigation
         (referred to in paragraph (231) above) that indicated that skids can generally work
         with all types of consumables, regardless of whether these are flat sheet, hollow fibre
         TFF or DFF.
(234) Competitors are split in their views as to whether systems can typically
         accommodate different types of bioprocessing filtration consumables. Five indicate
         that skids can work only with one type of consumable, two that skids can work with
         both flat sheet and hollow fibre, and three that skids work with all consumables,
         including DFF.182 On the basis of their explanations, the Commission understands
         that skids could potentially work with both flat sheet and hollow fibre consumables,
178 Questionnaire Q1, question G.B.6.
179 “Turnkey systems for tangential flow filtration (TFF), single-use hollow fiber filters and flat sheet
    cassettes enable process and cost efficiencies” (Repligen), https://www.repligen.com/technologies/tff and
    “[w]e manufacture TFF systems using either flat sheet cassettes or hollow fiber (HF) modules”,
    https://www.ymcpt.com/resource-library/tff-uf-mf-membrane-systems-overview;                 Doc ID3121
    and ID3122.
180 https://www.abec.com/process-engineering-equipment/;                   https://www.abec.com/single-use/;
    https://www.zeta.com/en/downstream-systems_62 htm; https://www.zeta.com/en/tff-skid_20_d_184 htm;
    http://cotterbrothers.com/products/.
181 https://www repligen.com/technologies/krosflo-tff/lab/kr2i;
    https://www repligen.com/technologies/krosflo-tff-1/systems/kmpi.
182 Questionnaire Q3, question G.B.6.
                                                         45
 ---pagebreak---        but not readily so as this would require adaptations: “Skids are typically set up to
       cater either TFF or DFF and to specific consumable types which limits the
       interchangeability between flat sheet and hollow fiber consumables”; “[t]his is
       possible it is just a question of plumbing and assembly design”; “[t]he different types
       of filtration consumables have different requirements for the equipment. In most
       cases the systems are dedicated to the consumables. Still there are some overlaps
       that can be managed for TFF HF & TFF FS but need to be considered during the
       planning/construction of the equipment”; “[a] skid needs to be designed to meet the
       flow rate, pressure and physical connectivity requirements of the device that it is
       connected to. In general, the flow rate demands of a hollow fibre device are different
       from those of a flat sheet device, to do an equivalent separation job. That being said,
       customers who know up-front that they want the flexibility to have a skid to do both
       could have one designed. The key features of connecting the pump to the skid (inlet,
       permeate outlet, retentate outlet, valves, pressure sensors, etc.) are all the same”.183
(235) On the basis of the above considerations, the Commission concludes that devices
       able to process both DFF and TFF filters, or flat sheet and hollow fibre filters are not
       common in the industry.
               c.    Suppliers’ ability to switch
(236) Third, the Commission investigated to what extent suppliers can supply any type of
       system (regardless of whether they are an established supplier for that type of
       filtration) within the typical lead times in which customers source bioprocessing
       filtration skids.
(237) In this regard, it appears that the timeframe of […] indicated by the Parties as the
       timeframe in which a supplier can provide any type of skid (regardless of whether it
       has a presence in only flat sheet TFF, hollow fibre TFF or DFF) would in essence be
       in line with the typical lead times for customers to source bioprocessing filtration
       skids (overall).184 The Commission notes that this might however be different for
       DFF systems in particular, as these are less customised than TFF systems and
       therefore would have shorter lead times. It is therefore not surprising that the
       Notifying Party only claims in this context that TFF systems are typically
       customised (while not claiming this for DFF systems), as well as with replies from
       the market test: “TFF skids are usually customized thus inducing a longer lead time.
       For DFF skids, standard skids are used with shorter lead time”; “[f]or our DFF
       filtration needs our requirements are very simple in that a pump and pressure
       monitoring are all we require, and these are mostly available ‘off the shelf’”.185
(238) A majority of competitors who expressed an opinion on this point indicate that they
       have the ability to produce all types of skids (DFF, flat sheet or hollow fibre TFF)
       within a short time period and without incurring significant sunk costs.186 However,
       Repligen, the largest competitor in hollow fibre systems, indicates that it would not
183 Questionnaire Q3, question G.B.6.1.
184 Questionnaire Q1, question G.B.9.
185 Questionnaire Q1, question G.B.9.1.
186 Questionnaire Q3, question G.B.11.
                                                  46
 ---pagebreak---           be able to produce these within a short time period and without incurring significant
          costs, and indicates in that regard that this would be a multi-year effort.187
(239) The market investigation also generally showed that lead times vary according to
          degree of customisation. For instance, a competitor indicated that “[i]t depends if the
          systems are custom made as they would also have longer lead times if the systems
          are large”.188 While the Notifying Party claims that […]% of Danaher's TFF system
          sales are “custom and customized to at least some extent”,189 customers indicated
          that they do not see it as mostly a supplier of customised systems.190 Competitors
          also generally seem to not consider the Notifying Party as mostly a supplier of
          customised skids.191
(240) Therefore, the Commission considers that it is likely that the lead times for DFF
          systems as well as the Parties’ off-the-shelf TFF systems would be shorter than the
          time period needed by a supplier to start producing these systems when it is not
          already doing so, and that supply-side substitutability would therefore be limited in
          these areas.
(241) Moreover, it appears that there are other barriers to entry than engineering
          considerations. Competitors explain that reputation and experience as well as
          associated consumables are important: “[r]eputation and supply of core tech are
          they key barriers”; “[e]xperience, reputation and associated consumable products”;
          “[i]n filtration, reputation, brand, and customer validation are very strong
          differentiators”; “[e]xperience and reputation”; “[l]a non-fourniture des
          consommables (media filtrant) est un obstacle car le fournisseur du media filtrant
          peut influencer le client en conditionnant son support et ses garanties au choix de
          son skid et de ses “filter holders””;192 “[l]a réputation est aussi très difficile à
          obtenir si on ne propose pas ces consommables”;193 “[c]ustomers value
          experience/reputation as a top priority. No customer in this industry wants to be the
          first to try something new or bring something new before the regulators.
          Sophisticated Quality Systems is another barrier to entry. Customers expect that
          their suppliers will have extensive Quality Systems (essentially to the level of their
          own) and that they can be audited by customers at any time”;194 “[s]uppliers design
          their skids for the TFF products that they offer. For example, Repligen offers both
          cassettes and hollow fibers, so their systems are capable of operating with both form
          factors. Pall and Millipore offer the cassette configuration for TFF, so their systems
          are designed to operate with cassettes”.195 In light of this, the Commission considers
          that there are barriers to entry other than engineering considerations, such as
          reputation, experience and having an offering of associated consumables.
187 Questionnaire Q3, question G.B.11.1.
188 Questionnaire Q3, question G.B.9.1.
189 Form CO, paragraph 1265.
190 Questionnaire Q1, question G.B.10.2.
191 Questionnaire Q3, question G.B.10.2.
192 Courtesy translation: “the absence of supply of consumables (filtering media) is an obstacle because the
    filtering media supplier can influence the client by conditioning its support and warranties to the choice
    of its own skid and of its filter holders”.
193 Courtesy translation: “achieving a level of reputation is also very difficult if you don't supply such
    consumables”.
194 Questionnaire Q3, question G.B.12.2.
195 Questionnaire Q3, question G.B.7.1.
                                                          47
 ---pagebreak--- (242) The Commission considers the importance attached to reputation and experience
       particularly relevant given that it appears from the market shares that competitors
       seem much more present in certain segments and less in others. Similarly, it
       considers the importance attached to offering associated consumables particularly
       relevant given the differences of the suppliers present in each consumable type.
(243) In addition, relative price increases in systems of a particular type, such as those that
       could hypothetically be introduced as a result of the Transaction, do not seem likely
       to incentivise suppliers to switch (nor push suppliers to sell more of a particular
       system they do not have a focus on), as other factors such as the strengths and
       opportunities in associated consumables seem to be a main driver of such behavior.
       Competitors explain: “[d]riven by our consumable growth. If high, Repligen will
       enter into the market with differentiating technology”; “[t]he consumable part would
       likely include components that are specified by the end user. Besides, it generates
       the recurring revenue stream”; “[c]urrently our company does not provide any
       standard skids for any technology for which we do not have the consumable”196;
       “[w]e have decided that our return on investment (ROI) to provide a standard
       hollow fibre skid is weak because customers are likely to go to a supplier who
       ‘understands’ how to design the skid based on the consumables […]”.197
(244) In light of the foregoing, the Commission considers that there are strong indications
       that there is no supply-side substitutability between different types of bioprocessing
       filtration systems. Therefore, the Commission will assess DFF, flat sheet and hollow
       fibre TFF systems as distinct markets, as well as systems overall and TFF systems
       overall. For the purpose of this decision, it can ultimately be left open. On the more
       narrowly defined plausible markets for TFF systems (SUT), flat sheet systems (SUT)
       and hollow fibre systems (conventional), the Transaction would give raise to serious
       doubts as to its compatibility with the internal market or the functioning of the EEA
       Agreement due to horizontal non-coordinated effects. The Notifying Parties have
       submitted Commitments that would address those. On the broader plausible markets,
       the Transaction would not raise serious doubts. In light of this, the market definition
       does not change the outcome of the competitive assessment.
       (D)        Conventional and single use technologies
(245) Bioprocess filtration processes can be either conventional (stainless steel, “SS”) or
       SUT. Different systems are used for either technology, whereby the SUT systems
       have a disposable flow kit and tubing. The equipment is also different. For both
       conventional and SUT processes, the filters (consumables) are disposable. For some
       applications however, the SUT equipment has an integrated consumable.
       (D.i)      Notifying Party’s arguments
(246) According to the Notifying Party, customers decide between the two technologies on
       a case by case basis. As SUT does not require cleaning between batches, it saves the
       customer time and would be particularly interesting for a customer with plants that
       make several products. On the other hand, conventional technology might be more
       interesting at large production scales due to cost-efficiencies.
196 Questionnaire Q3, question G.B.12.3.
197 Questionnaire Q3, question G.B.13.
                                                  48
 ---pagebreak--- (247) The Notifying Party considers that markets for systems and equipment should not be
        further segmented between conventional and SUT, due to supply-side
        substitutability. They claim that there are no material technical differences that
        would prevent a supplier of conventional products to produce SUT and vice versa.
        The system’s size and design for SUT would follow the same engineering principles
        and practices as for stainless-steel skids, with the difference that the flow path
        components and sensors used are made of a different material.
        (D.ii)     Commission’s assessment
(248) The market investigation indicated that there are large engineering differences
        between the two technologies (SUT and conventional).198 Competitors explain: “[i]t
        is on a scale between a push bike and motorbike. SS skids are far more complex as
        you have to include all the support around cleaning and sterilisation, not something
        you need for SU”; “[f]or stainless steel, it’s engineering and at least a $5M R&D
        investment to start the program”; “[…] [i]l nous faudrait environ 1 à 2 ans pour
        proposer un skid “single use” en filtration”.199 200
(249) In addition, the majority of competitors who expressed an opinion on this point that
        was not yet active in both technologies indicated that they would not be able to
        produce the other technology within a short period time (relative to customers’
        average lead times) or without incurring significant costs.201 Among those indicating
        that it could not switch is Repligen, the Parties’ largest competitor in hollow fibre,
        who specifies the need to “[b]uilding infrastructure for all the elements needed for
        stainless steel skids”.202
(250) In light of the foregoing, the Commission considers that there are strong indications
        that there is no supply-side substitutability between the SS and SUT technologies.
        Therefore, the Commission will assess the relevant markets both overall, and by
        segmentation into SS and SUT. For the purpose of this decision, it can ultimately be
        left open. On the more narrowly defined plausible markets for TFF systems (SUT),
        flat sheet systems (SUT) and hollow fibre systems (conventional), the Transaction
        would give raise to serious doubts as to its compatibility with the internal market or
        the functioning of the EEA Agreement due to horizontal non-coordinated effects.
        The Notifying Parties have submitted Commitments that would address those. On
        the broader plausible markets, the Transaction would not raise serious doubts. In
        light of this, the market definition does not change the outcome of the competitive
        assessment.
        (E)        Segmentation by size
(251) The Notifying Party submits that all main competitors sell small and large systems,
        and that engineering houses build all types of systems. Table 11 below provides an
        overview of systems supplied by the Parties and their competitors, ordered by size.
198 Questionnaire Q3, question G.B.15.
199 Courtesy translation: it would take us about one or two years to offer a SUT filtration skid.
200 Questionnaire Q3, question G.B.15.1. Courtesy translation of the last quote: “[w]e would need 1 to 2
    years to supply a single use skid for filtration”.
201 Questionnaire Q3, question G.B.14.
202 Questionnaire Q3, question G.B.14.1.
                                                          49
 ---pagebreak--- Table 11 – Parties’ and competitors’ systems (off-the-shelf)203
(252) On the basis of the above, the Commission does not further segment the relevant
        product markets by size, for the assessment of the current Transaction.
        (F)      Conclusion on plausible relevant product markets
(253) On the basis of the above, the Commission analyses the competitive impact of the
        proposed Transaction under the following plausible relevant product markets: overall
        bioprocessing filtration consumables, DFF consumables, flat sheet TFF
        consumables, hollow fibre TFF consumables, overall bioprocessing filtration
        systems, DFF systems (overall and segmented by SUT and conventional
        technology), TFF systems (idem), flat sheet TFF systems (idem) and hollow fibre
        TFF systems (idem).
4.5.2.2. Geographic market definition
        (A)      Notifying Party’s arguments
(254) Similarly as for the other product markets in the area of bioprocessing instruments
        and consumables, the Notifying Party considers the relevant product markets to be
        worldwide or at least EEA-wide in scope, for the following reasons: (i) all major
        players are active and sell globally; (ii) transportation costs and custom tariffs are
203 Form CO, table 105.
                                                  50
 ---pagebreak---         low; and (iii) regulatory barriers have no or at most a very low impact on the
        geographic market definition. As regards regulatory differences within the EEA, the
        Notifying Party submits that these are technically the same, with the European
        Medicines Agency being centrally responsible for central evaluation and
        authorisation of biologics. While the process would slightly differ in the rest of the
        world, this is based on the same principles. In addition, the Notifying Party refers to
        the mutual recognition agreements with third-country authorities concerning the
        conformity assessment of biologics.
        (B)        Commission’s assessment
(255) The Commission considers that there are strong indications that the relevant
        geographic markets for bioprocessing filtration systems and consumables are world-
        wide in scope.204
(256) First, the Parties’ plants ship their bioprocess filtration products for all plausible
        markets from central locations to all regions in the world.205
(257) Second, customers who expressed an opinion in the market investigation on this
        point predominantly indicated that it is the worldwide level in which (i) they procure
        bioprocessing filtration systems; (ii) suppliers typically provide sales and after-sales
        services; (iii) prices are comparable; and (iv) the same suppliers are active. One
        customer however indicated that it is easier to use ‘European-active’ suppliers for
        customised systems, because of the importance of after-sales services.206 This is also
        the case for consumables.207 Customers did not indicate any differences between the
        different plausible product markets for consumables or systems in this regard.
(258) Third, competitors in their feedback agree with this, although a majority of those
        who expressed an opinion on this point indicate that prices for systems (not
        consumables) are comparable at the EEA-wide level (instead of at the worldwide
        level).208
(259) For the purpose of this decision, the Commission considers that the precise
        geographic market definition is most likely to be worldwide, although the exact
        market definition can be left open as the serious doubts raised by the Transaction are
        remedied by the Notifying Party’s Final Commitments.
4.5.3. Competitive assessment
4.5.3.1. Consumables
(260) There is a de minimis overlap in consumables overall, where the combined market
        share would be [20-30]% worldwide or in the EEA, with an increment of [0-5] and
        [0-5] percentage points respectively. Given (i) the negligible overlap; and
        (ii) considering that Danaher’s market shares are moderate; (iii) the lack of closeness
        given that the majority of this combined market share originates from Danaher’s
        activities in DFF consumables where GE is only active as […], while customers do
204 The Commission did not further look into equipment due to GE’s minimal footprint in this area.
205 Form CO, paragraphs 1529-1532.
206 Questionnaire Q1, question G.C.1.
207 Questionnaire Q1, question G.C.2.
208 Questionnaire Q3, question G. C.1.
                                                       51
 ---pagebreak---        not consider DFF and TFF to be substitutable; and (iv) due to an absence of
       substantiated concerns raised in the market investigation in this area, the
       Commission considers that the proposed Transaction does not lead to serious doubts
       as to its compatibility with the internal market or the functioning of the EEA
       Agreement as regards a potential overall market for consumables.
(261) There is a de minimis overlap in DFF consumables, where GE is active only […].
       GE’s market share in 2018 amounted to [0-5]% in both the EEA and worldwide
       (Danaher has a market share of about [20-30]% and [30-40]% respectively).209
       Given (i) the negligible overlap; and (ii) considering that Danaher’s market shares
       are moderate; and (iii) due to an absence of substantiated concerns raised in the
       market investigation in this area, the Commission considers that the proposed
       Transaction does not lead to serious doubts as to its compatibility with the internal
       market or the functioning of the EEA Agreement as regards DFF consumables.
(262) There is an overlap in TFF consumables, where the merged entity would in 2018
       obtain a combined market share of [20-30]% worldwide and [10-20]% in the EEA,
       with an increment of [10-20] and [5-10] percentage points respectively. Given (i) the
       moderate market shares; (ii) lack of closeness due to Danaher and GE’s focus on flat
       sheet and hollow fibre respectively; (iii) limitations of customers to switch between
       flat sheet and hollow fibre, as indicated in section 4.5.2.1(B); (iv) the presence of
       several other competitors, including a market leader that is almost twice as strong as
       the merged entity; and (v) the lack of substantiated concerns raised in the market
       investigation in this area, the Commission considers that the proposed Transaction
       does not lead to serious doubts as to its compatibility with the internal market or the
       functioning of the EEA Agreement as regards a potential overall market for TFF
       consumables.
(263) Similarly, the overlap in flat sheet consumables would be de minimis […]. GE’s
       market share in 2018 amounted to [0-5]% on a worldwide level, and to [0-5]% in the
       EEA (Danaher’s market shares were [10-20]% and [10-20]% respectively).210 Given
       (i) the negligible overlap; and (ii) considering that Danaher’s market shares are
       moderate, and (iii) due to an absence of substantiated concerns raised in the market
       investigation in this area, the Commission considers that the proposed Transaction
       does not lead to serious doubts as to its compatibility with the internal market or the
       functioning of the EEA Agreement as regards flat sheet consumables.
(264) In hollow fibre consumables, the overlap would also be de minimis. Danaher, active
       […]. According to the market shares provided by the Parties, GE would in 2018
       have had a market share of [40-50]% both worldwide and in the EEA (Danaher
       would have had a market share of [0-5]% and [0-5]% respectively).
(265) [Danaher’s R&D strategy and pipeline information].
(266) In this respect, the Notifying Party considers that no potential competition issues
       would arise from the Transaction in this area for the following reasons.
(267) First, [pipeline information and Danaher’s R&D strategy].
209 Form CO, paragraph 1153.
210 Form CO, paragraph 1153 and RFI 5, question Q1.
                                                    52
 ---pagebreak--- (268) Second, [pipeline information].
(269) Third, [pipeline information].
(270) Fourth, [GE’s R&D strategy].
(271) Fifth, [pipeline information].
Figure 7 – [Internal assessment of competitive relationships]211
[…]
(272) Sixth, the Notifying Party assumes that [pipeline information].
(273) Therefore, the Notifying Party considers that [internal assessment of competitive
       relationships]. In addition, [pipeline information; internal assessment of competitive
       relationships]. In addition, the Notifying Party considers that [pipeline information].
(274) The Parties indicated not to be in a position to provide detailed market shares for this
       application, [pipeline information].
(275) The Commission further investigated this matter, in order to verify to what extent
       [competitive assessment and pipeline information], and in that regard would
       potentially cause the Transaction to raise doubts given [pipeline information].
(276) The market investigation confirms that [pipeline information].212 [Pipeline
       information].213 The Commission understands that this is linked to the fact that
       [pipeline information].214
(277) More importantly, [competitive assessment and pipeline information].215
(278) In addition, the Commission understands that [assessment of the competitive
       landscape].216
(279) On the basis of the above, the Commission considers that the Transaction would not
       raise serious doubts as to its compatibility with the internal market as regards
       [pipeline information].
(280) A large majority of customers who expressed an opinion in the market investigation
       on this point indicated that they did not expect that the Transaction would have an
       impact on price, quality, innovation, product range or security of supply as regards
       the market for flat sheet or hollow fibre TFF consumables.217 This is largely in line
211 […].
212 Questionnaire Q1, question G.B.3.
213 Questionnaire Q1, question G.B.4.
214 Questionnaire Q3, question G.B.4.
215 Questionnaire Q1, question G.B.5.
216 Questionnaire Q3, question G.D.7.
217 Questionnaire Q1, questions G.D.9.2 and G.D.9.3.
                                                     53
 ---pagebreak---         with the replies from competitors, of which a majority of those who expressed an
        opinion on this point did not consider there to be an impact these markets.218
(281) In light of the considerations in paragraphs (260) to (280) above as well as all
        evidence available to it, the Commission concludes that, in the possible worldwide
        or EEA markets for DFF, TFF consumables, flat sheet TFF consumables and hollow
        fibre TFF consumables, the Transaction will not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement due
        to horizontal non-coordinated effects.
4.5.3.2. Equipment
(282) There is a minimal overlap in flat sheet equipment, where GE had […] sales of
        USD […] worldwide in 2018. This would not be an affected market, and the
        combined market share would in 2018 amount to [5-10]% (GE [0-5]% and
        Danaher [5-10]%) worldwide, and [5-10]% (GE [0-5]% and Danaher [5-10]%) in the
        EEA. The decision does not further address equipment. There is no overlap in DFF
        and TFF hollow fibre equipment.219
4.5.3.3. Systems
(283) According to the Notifying Party, an overall market for systems would not be an
        affected market. The Parties would have a combined market share of [10-20]%
        (GE [0-5]%, Danaher [5-10]%) worldwide and [5-10]% (GE [0-5]%,
        Danaher [5-10]%) in the EEA in 2018.220
(284) A market for DFF systems overall or markets segmented by SUT and stainless steel
        are not affected markets. The combined worldwide market share would in 2018 be
        highest in SUT DFF systems, namely at [10-20]% (GE [0-5]%, Danaher [5-10]%).
        GE […] in the EEA.221
(285) An overall market for TFF systems would be an affected market worldwide, but not
        in the EEA. The combined market share in 2018 was [20-30]% (GE [5-10]% and
        Danaher [10-20]%) worldwide and [10-20]% (GE [0-5]% and Danaher [10-20]%) in
        the EEA.
(286) The Commission recalls that segmentations of TFF systems which possibly
        constitute relevant product markets are the following: (i) TFF systems (SUT);
        (ii) TFF systems (conventional); (iii) flat sheet TFF systems (overall); (iv) flat sheet
        TFF systems (SUT); (v) flat sheet TFF systems (conventional); (vi) hollow fibre TFF
        systems (overall); (vii) hollow fibre TFF systems (SUT); and (viii) hollow fibre TFF
        systems (conventional).
(287) The possible markets for flat sheet TFF systems (conventional) and hollow fibre TFF
        systems (SUT) are not affected. In the potential market for flat sheet TFF systems
        (conventional), the merged entity’s combined market share would amount
        to [10-20]% worldwide and [10-20]% in the EEA with an increment of [0-5]
        and [0-5] percentage points respectively (2018 data). While the market share on a
218 Questionnaire Q3, questions G.D.12.2 and G.D.12.3.
219 Form CO, paragraph 1153.
220 RFI 5, question 1, update of 10 October 2019.
221 RFI 5, question 1, update of 10 October 2019.
                                                       54
 ---pagebreak---        worldwide level is below the 20% threshold for affected markets, it is nonetheless
       […]. In light of the Parties’ declaration that it is difficult to estimate market shares,
       the Commission has performed spot-checks on their estimations on their
       competitors’ revenues. Based on the information at its availability, the Commission
       finds that the combined market share in 2018 was indeed [10-20]%.222 As regards
       the possible market for hollow fibre TFF systems (SUT), the Commission notes that
       Danaher is […] in this possible market and thus there is […], neither worldwide or
       EEA-wide, in the activities of the Parties.
(288) Other plausible product markets are affected. According to the market share data
       submitted by the Notifying Party, the merged entity had a market share in TFF
       systems (conventional) of [20-30]% worldwide and not affected in the EEA; for TFF
       systems (SUT) of [20-30]% worldwide and not affected in the EEA; for flat sheet
       TFF systems (overall) of [20-30]% worldwide and not affected in the EEA; for flat
       sheet TFF systems (SUT) of [30-40]% worldwide and [20-30]% in the EEA; for
       hollow fibre TFF systems (overall) of [20-30]% worldwide and not affected in the
       EEA; and for hollow fibre TFF systems (conventional) of [30-40]% worldwide and
       not affected in the EEA. Each of these potential markets will be analysed below, as
       well as the overall market for TFF systems.
       (A)        Market shares
(289) The Notifying Party declared that it had difficulties to provide market share
       estimates for bioprocess filtration systems. While Danaher would not systematically
       estimate market size and market shares for bioprocess filtration systems, it more
       systematically tracks the opportunities that it is contacted for. It has based its
       estimates for systems on this information. It consider that it misses in this data a
       large number of system opportunities that are bid out to engineering companies, or
       other suppliers or system fabricators, that do not give Danaher to opportunity to
       quote for system business. In addition, not all opportunities are made public.
(290) The market investigation has not yielded any reliable third party data as regards
       market size estimations. The SDi Report Bioprocessing Technologies 2018 report223
       for instance attributes a higher amount of turnover to GE than Danaher, […].224
(291) In its market investigation, the Commission has therefore collected turnover data of
       the Parties’ competitors, in order to gain comfort on the estimations used by the
       Notifying Party. As explained in sections (D), (G) and (H), it appears that the
       Parties’ market shares have been significantly understated for hollow fibre skids
       (overall and SUT) and flat sheet skids (SUT).
222 Questionnaire Q3, question G.D.3 and RFI to a competitor dated 18 November 2019.
223 Doc ID17.
224 Form CO, paragraph 1314.
                                                      55
 ---pagebreak--- (292) The market shares provided by the Notifying Party are summarised in the tables
           below.225
Table 12 – TFF systems (overall)
                                          Tangential Flow Filtration systems - Worldwide
                                     2018                                     2017                         2016
   Competitor GLOBAL      Revenues         Market share          Revenues           Market share Revenues       Market share
                           (USD)                (%)                 (USD)                (%)       (USD)             (%)
 Danaher                    […]              [10-20]%                 […]             [10-20]%       […]          [10-20]%
 GE Biopharma               […]               [5-10]%                 […]              [5-10]%       […]           [5-10]%
 Combined                   […]             [20-30]%                  […]             [10-20]%       […]          [10-20]%
 Merck Millipore            […]              [10-20]%                 […]             [10-20]%       […]          [10-20]%
 Sartorius                  […]              [10-20]%                 […]             [10-20]%       […]          [10-20]%
 Repligen                   […]              [10-20]%                 […]             [10-20]%       […]          [10-20]%
 LEWA/YMC                   […]               [5-10]%                 […]              [5-10]%       […]           [5-10]%
 ABEC                       […]               [5-10]%                 […]              [5-10]%       […]           [5-10]%
 Zeta Engineering           […]               [5-10]%                 […]              [5-10]%       […]           [5-10]%
 Others                     […]              [20-30]%                 […]             [20-30]%       […]          [20-30]%
 Total                      […]                100%                   […]               100%         […]            100%
Table 13 – TFF systems (conventional)
                                   Tangential Flow Filtration conventional systems - Worldwide
                                     2018                                    2017                         2016
   Competitor GLOBAL      Revenues        Market share           Revenues          Market share  Revenues       Market share
                           (USD)                (%)                (USD)                (%)       (USD)             (%)
 Danaher                    […]             [10-20]%                 […]             [10-20]%       […]           [5-10]%
 GE Biopharma               […]              [5-10]%                 […]              [5-10]%       […]           [5-10]%
 Combined                   […]             [20-30]%                 […]             [20-30]%       […]          [10-20]%
 Merck Millipore            […]             [10-20]%                 […]             [10-20]%       […]          [20-30]%
 Sartorius                  […]             [10-20]%                 […]             [10-20]%       […]          [10-20]%
 Repligen                   […]             [10-20]%                 […]             [10-20]%       […]          [10-20]%
 LEWA/YMC                   […]              [5-10]%                 […]              [5-10]%       […]           [5-10]%
 ABEC                       […]              [5-10]%                 […]              [5-10]%       […]           [5-10]%
 Zeta Engineering           […]              [5-10]%                 […]              [5-10]%       […]           [5-10]%
 Others                     […]             [20-30]%                 […]             [20-30]%       […]          [20-30]%
 Total                      […]                100%                  […]               100%         […]            100%
225  Parties’ updated response to RFI 5 question 1, annex 1.
                                                                      56
 ---pagebreak--- Table 14 – TFF systems (SUT)
                               Tangential Flow Filtration single-use systems - Worldwide
                                2018                                     2017                         2016
  Competitor GLOBAL  Revenues        Market share            Revenues          Market share  Revenues      Market share
                      (USD)                (%)                (USD)                    (%)    (USD)             (%)
 Danaher                […]            [20-30]%                 […]               [10-20]%     […]          [10-20]%
 GE Biopharma           […]              [0-5]%                 […]                  [0-5]%    […]            [0-5]%
 Combined               […]            [20-30]%                 […]               [10-20]%     […]          [10-20]%
 Merck Millipore        […]            [10-20]%                 […]               [10-20]%     […]          [10-20]%
 Sartorius              […]            [10-20]%                 […]               [10-20]%     […]           [5-10]%
 Repligen               […]            [10-20]%                 […]               [10-20]%     […]          [10-20]%
 LEWA/YMC               […]              [0-5]%                 […]                 [5-10]%    […]           [5-10]%
 ABEC                   […]              [0-5]%                 […]                 [5-10]%    […]           [5-10]%
 Zeta Engineering       […]              [0-5]%                 […]                 [5-10]%    […]           [5-10]%
 Others                 […]            [10-20]%                 […]               [20-30]%     […]          [20-30]%
 Total                  […]               100%                  […]                   100%     […]            100%
Table 15 – TFF flat sheet systems (overall)
                              Tangential Flow Filtration systems for Flat Sheet - Worldwide
                                2018                                      2017                        2016
   Competitor GLOBAL Revenues         Market share           Revenues           Market share Revenues      Market share
                       (USD)                (%)                (USD)                    (%)   (USD)             (%)
 Danaher                 […]            [10-20]%                 […]               [10-20]%    […]          [10-20]%
 GE Biopharma            […]              [0-5]%                 […]                  [0-5]%   […]           [5-10]%
 Combined                […]            [20-30]%                 […]               [10-20]%    […]          [10-20]%
 Merck Millipore         […]            [20-30]%                 […]               [20-30]%    […]          [20-30]%
 Sartorius               […]            [10-20]%                 […]               [10-20]%    […]          [10-20]%
 LEWA/YMC                […]             [5-10]%                 […]                [5-10]%    […]           [5-10]%
 ABEC                    […]             [5-10]%                 […]                [5-10]%    […]           [5-10]%
 Zeta Engineering        […]             [5-10]%                 […]                [5-10]%    […]           [5-10]%
 Others                  […]            [20-30]%                 […]               [20-30]%    […]          [20-30]%
 Total                   […]               100%                  […]                  100%     […]             100%
                                                                57
 ---pagebreak--- Table 16 – TFF flat sheet systems (SUT)
                         Tangential Flow Filtration single-use systems for Flat Sheet - Worldwide
                                2018                                      2017                             2016
   Competitor GLOBAL  Revenues         Market share           Revenues          Market share      Revenues      Market share
                       (USD)                 (%)               (USD)                   (%)         (USD)              (%)
 Danaher                […]              [20-30]%                […]               [10-20]%          […]          [20-30]%
 GE Biopharma           […]                [0-5]%                […]                 [0-5]%          […]            [0-5]%
 Combined               […]              [30-40]%                […]               [10-20]%          […]          [20-30]%
 Merck Millipore        […]              [20-30]%                […]               [20-30]%          […]          [20-30]%
 Sartorius              […]              [20-30]%                […]               [10-20]%          […]          [10-20]%
 LEWA/YMC               […]                [0-5]%                […]                [5-10]%          […]           [5-10]%
 ABEC                   […]                [0-5]%                […]                [5-10]%          […]           [5-10]%
 Zeta Engineering       […]                [0-5]%                […]                [5-10]%          […]           [5-10]%
 Others                 […]              [10-20]%                […]               [20-30]%          […]          [20-30]%
 Total                  […]                100%                  […]                  100%           […]             100%
                            Tangential Flow Filtration single-use systems for Flat Sheet - EEA
                                2018                                      2017                             2016
     Competitor EEA   Revenues         Market share           Revenues          Market share      Revenues      Market share
                       (USD)                 (%)               (USD)                   (%)         (USD)              (%)
 Danaher                […]              [10-20]%                […]               [10-20]%          […]          [20-30]%
 GE Biopharma           […]                [0-5]%                […]                 [0-5]%          […]            [0-5]%
 Combined               […]              [20-30]%                […]               [20-30]%          […]          [20-30]%
 Merck Millipore        […]              [20-30]%                […]               [20-30]%          […]          [20-30]%
 Sartorius              […]              [20-30]%                […]               [10-20]%          […]          [10-20]%
 LEWA/YMC               […]                [0-5]%                […]                [5-10]%          […]           [5-10]%
 ABEC                   […]                [0-5]%                […]                [5-10]%          […]           [5-10]%
 Zeta Engineering       […]                [0-5]%                […]                [5-10]%          […]           [5-10]%
 Others                 […]              [10-20]%                […]               [20-30]%          […]          [20-30]%
 Total                  […]                100%                  […]                  100%           […]             100%
Table 17 – TFF hollow fibre systems (overall)
                            Tangential Flow Filtration systems for Hollow Fiber - Worldwide
                                    2018                                    2017                           2016
    Competitor GLOBAL    Revenues         Market share          Revenues         Market share     Revenues      Market share
                          (USD)                  (%)              (USD)                  (%)        (USD)            (%)
 Danaher                   […]                 [0-5]%              […]                 [0-5]%         […]          [0-5]%
 GE Biopharma              […]                [20-30]%             […]               [10-20]%         […]         [5-10]%
 Combined                  […]               [20-30]%              […]               [20-30]%         […]        [10-20]%
 Repligen                  […]                [50-60]%             […]               [50-60]%         […]        [50-60]%
 LEWA/YMC                  […]                 [0-5]%              […]                 [0-5]%         […]         [5-10]%
 ABEC                      […]                 [0-5]%              […]                 [0-5]%         […]         [5-10]%
 Zeta Engineering          […]                 [0-5]%              […]                 [0-5]%         […]         [5-10]%
 Others                    […]                [10-20]%             […]               [10-20]%         […]        [20-30]%
 Total                     […]                  100%               […]                  100%          […]           100%
                                                                 58
 ---pagebreak--- Table 18 – TFF hollow fibre systems (conventional)
                           Tangential Flow Filtration conventional systems for Hollow Fiber - Worldwide
                                         2018                                   2017                             2016
    Competitor GLOBAL        Revenues          Market share         Revenues         Market share       Revenues      Market share
                              (USD)                  (%)              (USD)                (%)           (USD)             (%)
 Danaher                       […]                [5-10]%               […]              [0-5]%           […]            [0-5]%
 GE Biopharma                  […]               [20-30]%               […]            [20-30]%           […]          [10-20]%
 Combined                      […]               [30-40]%               […]            [20-30]%           […]          [10-20]%
 Repligen                      […]               [50-60]%               […]            [50-60]%           […]          [50-60]%
 LEWA/YMC                      […]                 [0-5]%               […]              [0-5]%           […]           [5-10]%
 ABEC                          […]                 [0-5]%               […]              [0-5]%           […]           [5-10]%
 Zeta Engineering              […]                 [0-5]%               […]              [0-5]%           […]           [5-10]%
 Others                        […]                [5-10]%               […]            [10-20]%           […]          [10-20]%
 Total                         […]                 100%                 […]              100%             […]             100%
(293) In the above tables provided by the Notifying Party, the term ‘others’ refers to other
          engineering companies, as well as some activities of Merck Millipore and Sartorius.
          (B)       TFF systems (overall)
          (B.i)     Notifying Party’s arguments
(294) The Notifying Party submits that (i) the merged entity’s combined market shares
          and/or the increment brought about by the Transaction will not be high, (ii) there
          will be strong competition remaining from bioprocess filtration suppliers and
          engineering firms, (iii) the merged entity would face substantial countervailing buyer
          power, (iv) Danaher’s win-loss data shows […], and (v) that the assessment for TFF
          will not change when segmenting between conventional and SUT technologies or
          between flat sheet and hollow fibre filtration.
          (B.ii)    Market reconstruction
(295) According to the market shares submitted by the Notifying Party, the merged entity
          would obtain a combined market share of [20-30]% worldwide with an increment of
          [5-10] percentage points in 2018. An EEA market would not be affected. Apart from
          the Parties, there would be three other large integrated competitors, as well as a
          number of engineering firms.
(296) The Commission has requested competitors to submit 2018 turnover data and has
          performed a market reconstruction on the basis of the information obtained.226 227
          The Commission is not able to disclose detailed market share information due to the
          confidential nature of such information. According to this reconstruction, the merged
          entity would obtain a worldwide market share of [20-30]% in an overall TFF
          systems market, with an increment of [5-10] percentage points. An EEA market
226  Questionnaire Q3, question G.D.3; RFIs to competitors dated 14 November, 15 November, 18 November,
     21 November, 25 November, 26 November and 2 December.
227 In the segment of flat sheet TFF systems (conventional), the Parties’ low market share was confirmed. In
     the segment for hollow fibre systems (SUT), there would in any event […] be an […] as [Danaher’s
     presence].
                                                                     59
 ---pagebreak---        would not be affected on the basis of the data at the Commission’s availability,
       although sales information of engineering firms was not obtained for verification. As
       the Commission can therefore not exclude that this would also be an affected market,
       the Commission also assesses the EEA market for TFF systems.
       (B.iii)    Closeness
       (B.iii.a) Focus on flat sheet vs hollow fibre systems
(297) The Notifying Party claims that GE so far has not been a close competitor to
       Danaher.228 As regards an overall TFF market, Danaher would primarily focus on
       flat sheet TFF systems and GE on hollow fibre TFF systems. The Commission
       however considers that, as set out in section 4.5.2.1(C.ii), flat sheet and hollow fibre
       systems are likely to constitute distinct product markets and are therefore assessed
       also individually in this section. To the extent that there would be a potential overall
       TFF market, the Commission considers that the Parties would not be close
       competitors as regards their focus on flat sheet and hollow fibre systems in such an
       overall market.
       (B.iii.b) Scale
(298) The Notifying Party further indicates that the Parties are not close as regards the
       scale of systems sold, as over […]% of GE’s standard TFF systems revenues were
       from lab-scale systems in 2018, whereas this only amounted to […]% of Danaher’s
       standard TFF system revenues. More than […]% of Danaher’s standard TFF system
       revenues for 2018 were from pilot-and process-scale systems.229 The Parties
       however underline that revenues from custom TFF system offerings are not
       included, and that such data segregated by scale for custom systems is not tracked in
       its reporting system. The Commission therefore does not consider this data
       representative, also in light of Danaher’s claim that it would sell predominantly
       custom TFF systems.230
       (B.iii.c) Custom and off the shelf systems
(299) Filtration skids can be sold as a standard, off-the-shelf product, or designed and
       customised for individual customer needs.231 In this regard, GE indicates that it
       estimates that […]% of its TFF systems in 2018 were custom, while the Notifying
       Party claims that […]% of its TFF system sales are ‘custom and customized to at
       least some extent’.232 However, a small majority of customers who expressed an
       opinion on this point indicated that they do not see it as mostly a supplier of
       customised systems.233 Competitors also generally seem to not consider the
       Notifying Party as mostly a supplier of customised skids.234
228 Form CO, paragraph 1383.
229 Form CO, paragraph 1398.
230 Form CO, paragraph 1265.
231 Form CO, paragraph 1172.
232 Form CO, paragraph 1265.
233 Questionnaire Q1, question G.B.10.2.
234 Questionnaire Q3, question G.B.10.2.
                                                  60
 ---pagebreak---         (B.iii.d) Conclusion on closeness
(300) A significant number of customers indicated that Danaher is the closest competitor
        of GE in TFF systems, and vice versa. The Commission notes that Merck, Sartorius
        and Repligen are also frequently mentioned. Out of a large number of respondents,
        none have indicated an engineering firm as being a close competitor.235
(301) On the basis of the above, the Commission considers that the Parties and their
        competitors Merck, Sartorius and Repligen are close competitors in an overall
        market of TFF systems, but engineering firms236 (to whom the Notifying Party
        attributed significant shares) less so. On the other hand, the Commission considers
        that the Parties are likely close competitors within the segments for flat sheet and
        hollow fibre TFF skids.
        (B.iv)     Competition from engineering firms
(302) The Notifying Party claims that engineering firms compete closely with the Parties
        and other bioprocessing equipment suppliers.237 These engineering firms would be
        addressing the same customers, and have deep technical knowledge, experience and
        established supply relationships with some of the major bioprocessing customers.
(303) It however appears that the customers that source from the Parties actually in only
        very few instances have sourced from suppliers other than the traditional suppliers in
        the bioprocessing industry (the Parties, Merck, Sartorius and Repligen). In this
        regard, the Commission found in the market investigation that out of 41 respondents
        (which were overall a sample of the Parties’ customers), only 1 indicated to have
        sourced TFF skids from the three larger engineering firms to whom the Notifying
        Party had attributed a significant amount of market share.238
(304) In addition, the competitive strength of such engineering firms, such as
        LEWA/YMC, ABEC, Cotter Brothers, Zeta and Bilfinger, appears to be perceived
        by most customers as much lower compared to the traditional suppliers in the
        bioprocessing industry (including the Parties).239 Customers explain: “we do not
        consider such firms to compete equally with the Parties”; “[i]neffective engagement
        with the Bioprocessing industry from the engineering firms, especially smaller
        biotech companies and those engaging in pre-clinical or clinical work”; “[w]e view
        engineering companies compete on custom SS skids but not on SUT”; “[i]n our
        experience, an engineering company and the bioprocessing companies play
        complementary roles in the sense that an engineering company can help customize a
        design of a product that is made by the bioprocessing company. The engineering
        company does not ‘manufacture’ anything other than drawings”; “engineering firms
        end up going to the original suppliers for support. Our company prefers to work
        directly with the established bioprocessing players where we can count on them for
        troubleshooting and service in the long run”; “GE will charge an engineering
        company a higher price for equipment than they would charge us if we went directly
        to GE for the design work. they compete with the engineering companies for the
235 Questionnaire Q1, question G.D.3.
236 See further below in the next section.
237 Form CO, paragraph 1328.
238 Questionnaire Q1, question G.D.1.
239 Questionnaire Q1, question G.D.2, and follow-up RFI to competitors of 11 and 13 November 2019.
                                                       61
 ---pagebreak---          design work so will discount the equipment if you use them for design as well as
         equipment”.240
(305) Competitor also explain that these firms might be dependent on the established
         suppliers to the bioprocessing industry: “[t]hey tend to use the established players as
         subcontractors. They will issue a URS on behalf of their clients and project manage
         the purchase of the skid”; “[a]s a supplier we receive User Requirement
         Specifications either from customers or from engineering companies. They define in
         detail what kind of functionality is required. The specifications sometimes even go
         down to Component / BOM level”.241
(306) The Commission points out that the Notifying Party indicated, as a caveat to the
         market shares it provided, to have limited visibility on the presence of engineering
         firms. It explains that these would namely participate in tenders where Danaher itself
         is generally not invited to. The Commission considers this also to confirm that the
         established bioprocessing suppliers such as the Parties might serve a different part of
         the market than these engineering firms.
(307) Furthermore, [Parties’ views of the engineering firms’ presence].
Figure 8 – […]242
[…]
(308) The Commission therefore finds that engineering firms potentially compete only in a
         neighbouring but different area in the market, and would in any event only exert a
         limited competitive constraint on the merged entity.
         (B.v)     Expansion
(309) As the Parties pointed out, Repligen announced in its 2018 Annual report that it will
         increase its production capacity for flat sheet TFF systems and hollow fibre TFF
         systems.243 The Commission has assessed this in its market investigation but is
         unable to elaborate on its findings due to the inherent confidential nature of such
         strategic information. Nonetheless, the Commission takes note of this, but does not
         consider the expansion of a single competitor sufficient to alleviate serious doubts in
         the markets concerned, also in light of the differentiation in these markets where
         Repligen is currently focussed on hollow fibre TFF skids (SUT), whereas the Parties
         combined are stronger in flat sheet TFF skids (SUT) and hollow fibre TFF
         skids (SS). In addition, Repligen does not have a material presence in flat sheet skids
         today. A production capacity increase in this regard would not guarantee a successful
         entry, as it will enter the market as a new player that would still have to convince the
         market of its reputation and experience, as indicated in the market definition that
         these are important factors for a supplier to enter a particular segment. The
         Commission therefore considers that this cannot be taken into account to assess the
         extent to which the merged entity would be competitively constrained. In any event,
240 Questionnaire Q1, question G.D.4.
241 Questionnaire Q3, question G.D.5.
242 […].
243 http://www.snl.com/Cache/1500119405.PDF?O=PDF&T=&Y=&D=&FID=1500119405&iid=4325751;
    Doc ID3123.
                                                    62
 ---pagebreak---        the Commission does not find serious doubts in the overall market for TFF systems,
       regardless of the materialization of this claim.
       (B.vi)     Entrants
(310) The Notifying Party argues that there are no significant barriers that would prevent
       other firms already operating in the bioprocess filtration space to redirect or adapt
       their supply to other types of systems, and that market entry therefore is possible and
       not impeded by high market barriers.
(311) As indicated in section 4.5.2.1(C.ii), the Commission finds that there are barriers to
       entry, namely reputation, experience, and the need to offer associated consumables.
       In addition, entry would only be incentivised when a producer would have an
       associated consumable in its offering. In that regard, the Commission does not
       consider it likely that a price increase in systems would trigger entry and to that
       extent would sufficiently constrain the merged entity. In any event, the Commission
       does not find serious doubts in the overall market for TFF systems, regardless of the
       materialisation of this claim.
       (B.vii)    Buyer power
(312) The Notifying Party submits that […]% of its revenue comes from […]% of its
       customers, and that […] of its clients represent […]% of its revenue.244 It claims that
       the merged entity would face substantial countervailing power from its customers, in
       particular biopharmaceutical companies, with large purchasing departments, using
       purchasing methods based on detailed request for proposals.
(313) The Commission however considers it unlikely that customers’ buyer power would
       be able to countervail competition concerns brought forth by the Transaction. In
       particular, the Commission notes that customers typically buy several products from
       suppliers in the bioprocessing industry, and are for any of these products that are
       specified in a commercial scale production line locked in to their supplier as
       switching would require revalidation and often re-filing with the relevant regulatory
       approval bodies.245
       (B.viii) Impact
(314) While a majority of customers who expressed an opinion on this point does not
       expect the Transaction to have an impact on flat sheet TFF skids or hollow fibre TFF
       skids, some do expect a price increase, quality decrease, product range decrease, a
       decrease in innovation and/or a decrease in security of supply.246 Competitors’
       replies are in line with this.247
       (B.ix)     Complaint by a competitor
(315) There was one complaint by a competitor, who submitted on an anonymous basis
       that the Parties would be the largest skid providers and would obtain a dominant
244 Form CO, paragraph 1358.
245 Questionnaire Q1, question B2.
246 Questionnaire Q1, question G.D.8.2.
247 Questionnaire Q3, questions G.D.11.2 and G.D.11.3.
                                                       63
 ---pagebreak---         position post-Transaction.248 In that regard, the Commission finds in its market
        reconstruction that the merged entity would indeed be the largest supplier, but
        however with moderate market shares. On that basis, the Commission does not
        accept this competitor’s claim.
(316) The complainant also submitted that GE would be dominant in small (lab scale)
        systems.249 As regards GE’s alleged dominant position in lab scale systems,
        according to the Notifying Party, [Danaher’s sales of lab-scale systems].250 In any
        event, this competitor did not substantiate this claim of dominance, and its concern
        (as regards dominance or its theory more broadly) was not shared by any customer
        or other competitor.251
        (B.x)      Complaint by a customer
(317) A customer anonymously submitted that the Parties are each other’s closest
        competitors in TFF skids, and the only viable suppliers that are able to meet its
        specifications. In that sense, it expects the transaction to lead to the removal of a
        competitive constraint with higher prices as a consequence.252
(318) The Commission questions the allegations made by the complainant. As regards
        indicated in paragraph (300), the Commission found that Merck, Sartorius and
        Repligen are also frequently mentioned as the Parties’ closest competitors in the
        market investigation. In addition, the Parties are also focussed on different filtration
        techniques, while the complainant indicated in the questionnaire that it is not able to
        substitute between these techniques.
(319) To the extent that the complainant would refer to the Parties’ closeness in the
        segments where they are strongest (TFF SUT, TFF flat sheet SUT, TFF SS HF), the
        Commission notes that the commitments by the Notifying Party would remove the
        full overlap in these segments.
        (B.xi)     Conclusion
(320) In light of the considerations in paragraphs (295) to (319) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or
        EEA-wide market for TFF systems (overall), the Transaction will not give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects given the Parties’
        moderate market shares, and the presence of at least three other significant
        competitors.
        (C)        TFF systems (SUT)
(321) According to the market shares submitted by the Notifying Party, the merged entity
        would in 2018 obtain a combined market share of [20-30]% worldwide, with an
        increment of [0-5] percentage points, while an EEA market would not be affected.
248 Doc ID859.
249 Doc ID859.
250 Letter from the Notifying Party to the FTC dated 9 October 2019.
251 Questionnaire Q1, question G.D.8.4 and questionnaire Q3, question G.D.11.4.
252 Doc ID2562.
                                                        64
 ---pagebreak---          Apart from the Parties, there would be three other large integrated competitors, as
         well as a number of engineering firms.
(322) The Commission has requested competitors to submit 2018 turnover data and has
         performed a market reconstruction on the basis of the information obtained.253 254
         The Commission is not able to disclose detailed market share information due to the
         confidential nature of such information. According to this reconstruction, the merged
         entity would be market leader with a market share of [30-40]% and an increment of
         [5-10] percentage points on a worldwide level with only one other competitor left as
         a significant player. The combined market share in the EEA would amount to
         [20-30]%, with an increment of [0-5] percentage points.
(323) In addition, a large part of the market has been attributed by the Parties to
         engineering firms and a category of ‘others’ that is not specified. The Commission’s
         market investigation did not obtain turnover data of these latter firms in order to
         verify their presence. Generally however, the market shares of such firms in other
         segments have been overestimated by the Parties. In this regard, the Commission
         cannot exclude that this would also be the case here and that therefore the Parties’
         worldwide market share would be even higher than [30-40]%.
(324) As indicated in section (B.iv), these engineering firms to whom the Notifying Party
         attributed a large part of the market would only exert a limited competitive constraint
         on the merged entity.
(325) Similarly as indicated in section (B.v), Repligen’s announced capacity expansion
         cannot be taken into account to assess the extent to which the merged entity would
         be competitively constrained and the presence of buyer power (if any) would not
         suffice to guarantee that the merged entity would be competitively constrained.
(326) While the Parties argue that even if supply side substitutability would not lead to a
         single overall market for systems, producers active in one type of system are
         potential entrants into the other. However, in light of the large engineering
         differences, as well as importance for a supplier to have reputation and experience,
         as described in section 4.5.2.1(C.ii), the Commission does not consider that entry
         would be easy and would not constrain the merged entity.
(327) In addition, the Commission finds that the Parties are particularly close competitors,
         considering that both focus on flat sheet filtration within this segment, while the
         other significant competitor in this segment predominantly focuses on hollow fibre
         filtration.
(328) In light of the considerations in paragraphs (321) to (327) above as well as all
         evidence available to it, the Commission concludes that, in the worldwide or EEA-
         wide market for TFF systems (SUT), the Transaction will raise serious doubts as to
         its compatibility with the internal market or the functioning of the EEA Agreement
         due to horizontal non-coordinated effects given in particular (i) the uncertainty as to
         the market shares; (ii) the limited number of remaining traditional suppliers other
253 Questionnaire Q3, question G.D.3; RFIs to competitors dated 14 November, 15 November, 18 November,
    21 November, 25 November, 26 November and 2 December.
254 In the segment of flat sheet TFF systems (conventional), the Parties’ low market share was confirmed. In
    the segment for hollow fibre systems (SUT), there would in any event […] be an […] as [Danaher’s
    presence].
                                                        65
 ---pagebreak---          than engineering firms; and (iii) the closeness of competition due to their common
         focus on flat sheet filtration. In any event, this therefore also replicates the findings
         in the segment of flat sheet TFF (SUT).
         (D)      Flat sheet TFF systems (SUT)
(329) According to the market shares submitted by the Notifying Party, the merged entity
         would in 2018 obtain a combined market share of [30-40]% worldwide or [20-30]%
         in the EEA, with an increment of [0-5] and [0-5] percentage points respectively.
         Apart from the Parties, there would be two other large integrated competitors, as
         well as a number of engineering firms.
(330) The Commission has requested competitors to submit 2018 turnover data and has
         performed a market reconstruction on the basis of the information obtained.255 256
         The Commission is not able to disclose detailed market share information due to the
         confidential nature of such information. According to this reconstruction, the merged
         entity would be market leader with a market shares of [50-60]% on a worldwide
         level, which is [Parties’ presence], with an increment of [5-10] percentage points. In
         the EEA, the merged entity would have a market share of [40-50]%, with an
         increment of [5-10] percentage points.
(331) In addition, a large part of the market has been attributed by the Parties to
         engineering firms (for which the Party had identified market shares per individual
         supplier, as shown in the tables in section (A)) and a category of ‘others’ (which is
         not specified by individual supplier). The Commission’s market investigation found
         that these engineering firms are only to a limited extent present. The Commission
         cannot exclude that the Notifying Party also overestimated the presence of the
         unspecified category of ‘others’, as market shares obtained from the market
         investigation have generally also been overestimated. In this regard, the Commission
         cannot exclude that this would also be the case here and that therefore the Parties’
         worldwide and EEA market shares would even be higher.
(332) As indicated in section (B.iv), these engineering firms to whom the Notifying Party
         attributed a large part of the market would only exert a limited competitive constraint
         on the merged entity.
(333) Similarly as indicated in section (B.v), Repligen’s announced capacity expansion
         and the presence of buyer power (if any) would not suffice to guarantee that the
         merged entity would be competitively constrained.
(334) While the Parties argue that even if supply side substitutability would not lead to a
         single overall market for systems, producers active in one type of system are
         potential entrants into the other. However, in light of the barriers set out in
         section 4.5.2.1(C.ii.b) (large engineering differences, as well as importance for a
         supplier to have reputation and experience), the Commission does not consider that
         entry would be easy and would not constrain the merged entity.
255 Questionnaire Q3, response G.D.3; RFIs to competitors dated 14 November, 15 November, 18 November,
    21 November, 25 November, 26 November and 2 December.
256 In the segment of flat sheet TFF systems (conventional), the Parties’ low market share was confirmed. In
    the segment for hollow fibre systems (SUT), there would in any event […] be an […] as [Danaher’s
    presence].
                                                        66
 ---pagebreak--- (335) As indicated in paragraph (B.viii), while a majority of customers who expressed an
      opinion on this point does not expect the Transaction to have an impact on flat sheet
      TFF skids, some do expect a price increase, quality decrease, product range
      decrease, a decrease in innovation and/or a decrease in security of supply. Due to the
      market investigation questionnaire being very lengthy, no particular questions were
      asked on the impact for flat sheet TFF skids (SUT) in specific.
(336) In light of the considerations in paragraphs (329) to (335) above as well as all
      evidence available to it, the Commission concludes that, in the worldwide or EEA-
      wide market for flat sheet TFF systems (SUT), the Transaction will give rise to
      serious doubts as to its compatibility with the internal market or the functioning of
      the EEA Agreement due to horizontal non-coordinated effects given in particular the
      high combined market share at a worldwide level.
      (E)      Flat sheet TFF systems (overall)
(337) According to the market shares submitted by the Notifying Party, the merged entity
      would obtain in 2018 a combined market share of [20-30]% worldwide with an
      increment of [0-5] percentage points, while an EEA market would not be affected.
      Apart from the Parties, there would be two other large integrated competitors, as
      well as a number of engineering firms.
(338) Based on the Commission’s market reconstruction, the combined worldwide market
      share was slightly higher, but [20-30]% and with an increment that would remain
      below [0-5] percentage points. In addition, the presence of other strong competitors,
      namely Merck and Sartorius, as well as some larger engineering firms, have been
      confirmed. The market share in the EEA would be [20-30]% with an increment
      of [0-5]%.
(339) The Commission did not receive any further evidence that would raise concerns in
      the markets for TFF systems (overall) that the Commission considers plausible.
(340) In light of the considerations in paragraphs (337) to (339) above as well as all
      evidence available to it, the Commission concludes that, in the worldwide or EEA-
      wide market for flat sheet TFF systems (overall), the Transaction will not give rise to
      serious doubts as to its compatibility with the internal market or the functioning of
      the EEA Agreement due to horizontal non-coordinated effects.
      (F)      TFF systems (conventional)
(341) According to the market shares submitted by the Notifying Party, the merged entity
      would in 2018 obtain a combined market share of [20-30]% worldwide with an
      increment of [5-10] percentage points while an EEA market would not be affected.
      Apart from the Parties, there would be three other large integrated competitors, as
      well as a number of engineering firms.
(342) Based on the Commission’s market reconstruction, the combined worldwide market
      share was slightly higher, but [20-30]%. In addition, the presence of other strong
      competitors, namely Merck and Sartorius, have been confirmed. An EEA market
      would not be affected.
                                               67
 ---pagebreak--- (343) The Commission did not receive any further evidence that would raise concerns in
        the markets for TFF systems (conventional) that the Commission considers
        plausible.
(344) In light of the considerations in paragraphs (341) to (342) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or EEA-
        wide market for TFF systems (conventional), the Transaction will not give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects.
        (G)       Hollow fibre TFF systems (conventional)
(345) According to the market shares submitted by the Notifying Party, the merged entity
        would in 2018 obtain a combined market share of [30-40]% worldwide or [5-10]%
        in the EEA, with an increment of [5-10] and [0-5] percentage points respectively.
        Apart from the Parties, there would be one other large integrated competitor, as well
        as a number of engineering firms.
(346) As indicated in section (B.iv), the Commission finds that engineering firms would
        not competitively constrain the merged entity.
(347) Furthermore, the market investigation revealed that Repligen is not active within this
        segment,257 leaving thus only the Parties and a number of fringe players. Based on
        the market reconstruction, the merged entity would obtain a market share of
        [70-80]% on a worldwide level, which is [Parties’ presence], with an increment of
        [10-20] percentage points. In the EEA, there is no overlap as Danaher is not active.
(348) As indicated in section (B.viii), while a majority of customers who expressed an
        opinion on this point does not expect the Transaction to have an impact on hollow
        fibre TFF skids, some do expect a price increase, quality decrease, product range
        decrease, a decrease in innovation and/or a decrease in security of supply. Due to the
        market investigation questionnaire being very lengthy, no particular questions were
        asked on the impact for hollow fibre TFF skids (conventional) in specific.
(349) In light of the considerations in paragraphs (345) to (348) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide market for
        hollow fibre TFF systems (conventional), the Transaction will give rise to serious
        doubts as to its compatibility with the internal market or the functioning of the EEA
        Agreement due to horizontal non-coordinated effects.
        (H)       Hollow fibre TFF systems (overall)
(350) According to the market shares submitted by the Notifying Party, the merged entity
        would in 2018 obtain a combined market share of [20-30]% worldwide with an
        increment of [0-5] percentage points, while an EEA market would not be affected as
        [Danaher’s presence] in the EEA. Apart from the Parties, there would be one other
        large integrated competitor, as well as a number of engineering firms.
(351) As indicated in section (B.iv), the Commission finds that engineering firms would
        not competitively constrain the merged entity. In that regard, the transaction would
        result in a three to two, with only fringe players remaining.
257 RFI to a competitor dated 13 November 2019.
                                                    68
 ---pagebreak--- (352) As indicated in section (B.viii), while a majority of customers who expressed an
       opinion on this point does not expect the Transaction to have an impact on hollow
       fibre TFF skids, some do expect a price increase, quality decrease, product range
       decrease, a decrease in innovation and/or a decrease in security of supply.
(353) Based on the market reconstruction, the merged entity would in 2018 obtain a
       combined worldwide market share of [30-40]% with an increment of [5-10]
       percentage points. An EEA market would not be affected.
(354) The Commission did not receive any further evidence that would raise concerns in
       the plausible markets for TFF systems (conventional).
(355) In light of the considerations in paragraphs (350) to (353) above as well as all
       evidence available to it, the Commission concludes that, in the worldwide or EEA-
       wide market for hollow fibre TFF systems (overall), the Transaction will not give
       rise to serious doubts as to its compatibility with the internal market or the
       functioning of the EEA Agreement due to horizontal non-coordinated effects, given
       the moderate market shares and increment.
       (I)        Conclusion
(356) On the basis of the considerations in paragraphs (260) to (354) above, the
       Commission considers that the Transaction would raise serious doubts in regards to
       the plausible markets of (i) TFF systems (SUT); (ii) flat sheet TFF systems (SUT);
       and (iii) hollow fibre TFF systems (conventional).
4.6.   Chromatography
(357) Chromatography is an important step in downstream bioprocessing because it is the
       core process for purifying the cell mass created in upstream bioprocessing.
       Chromatography refers to a method of separating and analysing the components or
       solutes within complex chemical mixtures. This separation is achieved by allowing a
       sample within a solvent to be carried by a mobile phase (in liquid or gaseous form)
       through an adsorbent serving as a stationary phase (typically in a column, gel or
       paper)
(358) The wider area of chromatography may generally be segmented according to the
       technique used in the chromatography process. One can generally distinguish
       between nine technology segments: (i) analytical high-pressure liquid
       chromatography (“HPLC”); (ii) preparative HPLC; (iii) clinical HPLC; (iv) gas
       chromatography (“GC”); (v) ion chromatography (“IC”); (vi) supercritical fluid
       chromatography (“SFC”); (vii) low-pressure liquid chromatography (“LPLC”);
       (viii) flash chromatography; and (ix) thin chromatography.258 The Parties’ activities
       overlap only in the field of LPLC as this is the only area of chromatography in which
       GE BioPharma is active.
258 Commission decision of 13 May 2011 in Case No COMP/M.6126 – Thermo Fisher Scientific/Dionex
    Corporation.
                                                 69
 ---pagebreak--- (359) LPLC chromatography is performed in a setup of three major components, which
        performs different tasks and are not substitutes:
         – the chromatography skid, which is essentially the hardware component
            controlling liquid flow in the chromatography process.
         – the chromatography column, which is the container holding the resins, that is the
            stationary phase, in which the chromatography process takes place.
         – the chromatography resins are complex chemical products and in general are the
            most critical component of the chromatography process. Resins are placed in
            columns to bind & capture designed proteins.
(360) The chromatography market also includes new technologies which are sometimes
        used instead of traditional column chromatography for certain applications, such as
        membrane chromatography, a technology where the fluid is not run through a resin-
        bed to capture certain molecules, but through a membrane with specific adsorbent
        features and continuous chromatography, a setup for the chromatography process in
        bioprocessing that allows for the simultaneous processing of multiple columns.
(361) The Commission has not analysed in previous cases the various potential markets in
        the area of LPLC chromatography.
4.6.1. Product market definitions
4.6.1.1. Chromatography skids
(362) Chromatography skids are the hardware component controlling liquid flow in the
        chromatography process. They comprise of a metal frame housing a pumping system
        of pumps, valves, sensors and tubing operating the flow of the fluid that goes
        through the column and electronic components that control and steer the process.
        The electronic components are in turn controlled and monitored through a system
        operating software. Figure 9 portrays a chromatography skid.
Figure 9 – Chromatography skid
                                                  70
 ---pagebreak--- (363) As described in paragraph (17) above, there is a growing trend in the bioprocessing
       industry to move from traditional clean-and-reuse stainless-steel products to single-
       use products. SUT chromatography skids are generally similar to conventional
       process chromatography skids with the main difference that the part of the skid that
       has contact to the product, that is the flow path through the chromatography control
       skid (which includes air traps, sensors, valves, fittings and pump tubing) is available
       as a single-use flow path. The SUT skid of one supplier is in general only compatible
       with the SU flow path of the same supplier (the skid and the flow path generally
       constitute a closed system). Figure 10 below portrays a SUT skid.
Figure 10 – SUT skid
(364) The Notifying Party considers that there are notable differences between
       conventional LPLC skids and SUT LPLC skids that may warrant the definition of
       separate product markets for SUT LPLC skids. This is because, direct competition
       typically takes places not between SUT and non-SUT equipment, but within SUT
       and non-SUT equipment (similarly for other products). A number of customers are
       determined to use only SUT (or only non-SUT) products in their process facilities
       depending on their analysis of what is the best economically viable option for them
       and their setup. In addition, the range of suppliers for non-SUT and SUT skids is
       somewhat different some engineering companies that offer conventional LPLC skids
       have only a limited presence (or none presence at all) in the field of SUT LPLC
       skids.259
(365) A majority of customers who expressed an opinion on this point have confirmed in
       the market investigation that they would not consider stainless steel chromatography
       skids and SUT chromatography skids as suitable alternatives for the same
       applications.260 As explained by one customer “not all applications of stainless steel
       chroma skids can be substituted by SUT chroma skids”.261
(366) For the purpose of this decision, and in the light of the fact that the market
       investigation confirmed the views of the Notifying Party that stainless steel
       chromatography skids and SUT chromatography skids do not constitute alternatives
       for the same application, the Commission will carry out its assessment with a
       distinction between stainless steel chromatography skids and SUT chromatography
       skids.
259 Form CO, paragraph 1783 to 1786.
260 Questionnaire Q1, question F.B.1.
261 Questionnaire Q1, question F.B.1.
                                                  71
 ---pagebreak--- 4.6.1.2. Continuous chromatography
(367) In continuous chromatography several (smaller) columns are operated in series over
        a larger number of cycles. By allowing simultaneous operation on many columns,
        continuous chromatography is generally considered to be more efficient. Moreover,
        continuous chromatography is associated with less resin consumption because more
        product can be applied to a given volume of resin as any unbound product from the
        first column is easily collected by the second column in the load phase. In terms of
        equipment and consumables, the difference between regular and continuous
        chromatography is limited to the skid. While continuous chromatography has for
        some time been an accepted practice by small-molecule manufacturers, it is not yet
        widely used in larger bio-manufacturing processes.262 The Notifying Party considers
        that continuous chromatography skids constitutes a growing separate product market
        from other chromatography skids, which has been confirmed by a majority of
        respondents who expressed an opinion in the market investigation on this point.263
(368) For the purpose of this decision, and in the light of the finding that continuous
        chromatography skids are different products than stainless steel or SUT skids, the
        Commission will carry out its assessment distinguishing between continuous
        chromatography skids and stainless steel or SUT chromatography skids.
4.6.1.3. Chromatography columns
(369) Chromatography columns are the containers holding the resins, that is, the stationary
        phase, in which the chromatography process takes place. From a customer
        perspective, skids and columns serve different purposes in the chromatography
        process and are generally sourced separately. They therefore constitute a separate
        market from chromatography skids Pre-filled columns are a specific form of
        columns in that they constitute an integrated product comprising both the column
        and the resin.
(370) Danaher is essentially not active in pre-filled columns and therefore the overlap
        between the Parties 'activities lies only in non-prefilled chromatography columns.
        For the purpose of this decision, the Commission will carry out its assessment on
        traditional non-prefilled columns.
4.6.1.4. Resins
(371) Resins are complex chemical products and in general are the most critical
        component of the chromatography process. Resins are consumables that need to be
        more frequently exchanged over time. The choice of the particular resin defines the
        efficiency, flow resistance, selectivity and binding capacity of the process. Due to
        the differences in their chemical characteristics and features, different types of resin
        are used for specific purification and production steps and the processing of
        particular molecules.264
262 Form CO, paragraphs 17514-1754.
263 Questionnaire Q1, question F.B.3.
264 Form CO, paragraphs 1736 and 1737.
                                                  72
 ---pagebreak--- (372) The Notifying Party distinguishes between different types of resins based on their
         performance and capabilities and considers that they are not substitutable from a
         demand side perspective.265266
          – Affinity resins utilise specific binding interactions between a ligand that is
             immobilised to a resin and its binding partner. The most commonly used affinity
             resin in biomanufacturing of monoclonal antibodies is Protein A resin because
             Protein A is a simple and effective means to purify antibodies. The Notifying
             Party distinguishes between Protein A and other affinity resins because the latter
             are selective for other biological targets and not antibodies.
          – Ion exchange (“IEX”) resins separate molecules based on their total electric
             charge. For targets such as monoclonal antibodies, IEX is typically an effective
             second purification step, while affinity resins are typically the initial step in the
             purification workflow. For non-antibody molecules, IEX resins are often a good
             starting point for the first purification step.
          – Mixed mode resins utilise matrices that have been functionalised with ligands
             capable of multiple interactions. This method is useful when purifying target
             proteins where other methods fail, because of its unique selectivity.
(373) A vast majority of customers who expressed an opinion on this point have confirmed
         in the market investigation that they would not consider different types of resins as
         suitable alternatives for the same applications. As explained by one customer,
         “[e]ach resin has specific capacity and selectivity whereas the mechanism of action
         is similar (e.g., affinity, cationic or anionic exchange, hydrophobicity)”. Another
         customer claimed that “[a]ny resin is specific to the process, ion exchange resins
         cannot be replaced with size exclusion resins and smaller beads can not be replaced
         with larger beads”.267
(374) For the purpose of this decision, and in particular the light of the findings of the
         market investigation that confirmed the views of the Notifying Party that different
         types of resins are not substitutable from a demand-side perspective, the
         Commission will carry out its assessment with a distinction between protein A
         resins, other affinity resins, ion-exchange resins and mixed mode resins, which are
         the resins in which the activities of Danaher band GE BioPharma overlap.
4.6.1.5. Membrane chromatography
(375) Membrane chromatography is a technology where the fluid is not run through a
         resin-bed to capture certain molecules, but through a membrane with specific
         adsorbent features. For certain applications, this makes them a superior solution
         because even if membrane chromatography is limited in dynamic binding capacity
         compared with column/resin technology, it allows for much faster flow-through
         rates.
(376) For that reason, while column chromatography (notably based on ion exchange
         resins) and membrane chromatography may be substitutable for certain applications,
265 Form CO, paragraphs 1740-1745.
266 The Parties’ activities do not overlaps as regards two different types of resins, namely size-exclusion
    resins and hydrophobic interaction resins as Danaher does not supply these resins.
267 Questionnaire Q1, question F.B.2.
                                                         73
 ---pagebreak---        the Notifying Party considers that there are differences in the demand structure that
       may indicate that membrane chromatography constitutes a separate product market
       from column chromatography performed with resins. In terms of supply, there are
       also differences in the structure of supply between the two areas. This is, for
       example, illustrated by the fact that Sartorius is the largest supplier of membrane
       chromatography absorbers, while it has no presence in conventional chromatography
       columns.268
(377) Respondents to the market investigation have in general confirmed this lack of
       substitutability       between    resins-based     chromatography      and    membrane
       chromatography. As explained by one customer, “[a]lthough they use similar
       ligands, their mass transfer properties are very different. As such they work better in
       different applications and there is not really that much overlap in reality. IEX resins
       dominate in protein application, while IEX membranes are better suited for larger
       macro-molecules like viruses”.269
(378) For the purpose of this decision, and in the light of the findings of the market
       investigation that confirmed the views of the Notifying Party resin-based
       chromatography and membrane chromatography are not substitutable from a
       demand-side perspective the Commission will carry out its assessment on membrane
       chromatography as a separate product market.
4.6.2. Geographic market definition
(379) The Notifying party submits that all relevant product markets for chromatography
       laid out above are at least EEA-wide in scope, for the following reasons:270
        – Transportation costs are low in absolute terms and not significant compared to
            the value of the relevant products, generally accounting for a very low proportion
            of […]% of the price for skids, columns and resins.
        – The relevant products are mostly manufactured at one single site worldwide and
            shipped from those sites to regional distribution hubs around the world. For
            example, GE BioPharma manufactures […] its skids in its factory in […], from
            where it ships its products to regional distribution hubs around the world.
        – There are only limited regulatory differences with respect to the sale of these
            products between different regions of the world and product design and technical
            specifications for skids, columns and resins are also generally uniform globally.
        – All major suppliers of skids, columns and resins operate globally and are present
            in every geography.
(380) Respondents to the market investigation have overwhelmingly confirmed that they
       source these products on a worldwide basis, with more sourcing within the EEA as
       regards complex chromatography skids, to ease the relationships with and services
       from the supplier.271
268 Form CO, paragraphs 1806-1808.
269 Questionnaire Q1, question F.B.5.1.
270 Form CO, paragraphs 1812-1815.
271 Questionnaire Q1, question F.C.1.
                                                   74
 ---pagebreak--- (381) On the basis of the above, the Commission can leave open the precise geographic
        definition for chromatography products as the competitive assessment remains the
        same regardless of whether a worldwide or an EEA-wide geographic definition is
        retained.
4.6.3. Competitive assessment
(382) The Danaher company operating in the areas of chromatography in which GE
        Biopharma is active is Pall. Pall is offering skids, columns, affinity, ion exchange
        and mixed-mode resins ([Danaher’s contractual relationship with its trading
        partner]), membrane chromatography products and continuous chromatography
        products. GE BioPharma offers standard and SUT skids, standard and pre-filled
        columns, all types of resins, continuous chromatography skids and […].
4.6.3.1. Chromatography skids
        (A)       Market shares and the Notifying party’s views
(383) As regards standard chromatography skids, the Notifying Party has estimated its
        combined market shares at worldwide level at [30-40]% (with an increment from
        Danaher of [0-5]%) and at EEA-level at [20-30]% (with an increment of [5-10]%).
        The Notifying Party has identified as alternative suppliers Merck Millipore ([5-10]%
        at world-wide and EEA level), Novasep ([5-10]% at both levels), Lewa ([0-5]% at
        both levels), as well as companies specializing in plant/process engineering services
        such as ABEC, Bilfinger, Cotter Boothers, Vogelsbuch and Zeta which together
        would account for [20-30]% of sales at worldwide and EEA level.
(384) As regards SUT chromatography skids, the Notifying Party has estimated its
        combined market shares at worldwide level at [80-90]-[90-100]% (with an increment
        of Danaher of [0-5]%) and at EEA-level at [70-80]-[80-90]% (with an increment of
        [0-5]%). The Notifying Party has identified as alternative suppliers Merck Millipore
        ([5-10]% at world-wide and EEA level), Verdot ([0-5]% at both levels), and
        Flexbiosis ([0-5]% at both levels).
(385) The Notifying Party therefore submits that the combined entity’s share of the
        conventional LPLC skids area will be moderate and not exceed [30-40]% worldwide
        or in the EEA. According to Danaher, customers will continue to have a choice
        between multiple suppliers, and the combined entity will continue to face effective
        competition from these suppliers. Danaher also submits there are also no substantial
        barriers that would prevent new suppliers from entering the skids segment.
(386) As regards SUT skids, the Transaction will result only in a small increase in segment
        shares given that Danaher’s revenues are small. The Notifying party also submits
        that Sartorius and Thermo-Fisher are potential entrants in this area.
        (B)       Commission’s assessment
(387) As regards standard chromatography skids, the Commission has found internal
        documents which indicate that the combined share is higher than what Danaher
        submits, in the area of [80-90]% for both skids and columns.272 The columns on the
        left of the graph refer to pilot-scale chromatography skids and columns (small
272 […].
                                                  75
 ---pagebreak---        instruments) and shows that GE would hold a market share between [60-70]% for
       each of the skids and columns with an increment of [10-20]% from Danaher. The
       columns on the centre refer to process-scale chromatography skids and columns
       (larger instruments) and shows that GE would hold a market share [50-60]% for each
       of the skids and columns with an increment [20-30]% from Danaher.
[…]
(388) Customers having responded to the market investigation have indicated that in that
       regard Pall would be the closest substitute to GE for both stainless skids and that
       therefore the Transaction would eliminate a significant alternative to GE.273 As
       explained by one customer, “[a]lternatives are fewer due to past mergers. However
       due to costs and regulatory timings, we currently would be exposed to a single
       supplier as we only use Pall & GE”.274 Another customer put forward that “[t]his
       would only leave Millipore as a reasonable alternative but systems are not available
       to cover labscale (process development) and large scale making scale up more
       cumbersome and also software is less sophisticated”.275
(389) With market shares [70-80]% at worldwide levels and [80-90]% at EEA level, GE
       already holds as regards SUT chromatography skids a very significant market
       position which is at this stage […] and the elimination of one of the alternatives,
       albeit small, would risk strengthening [GE’s market position]. In particular in SUT
       skids, GE [GE’s market position] the process development and pilot scales with their
       Unicorn systems offering.
(390) Moreover, a majority of customers who expressed an opinion in the market
       investigation on this point do not considered engineering companies as suitable
       alternatives due to inability to custom build a skid and lack in experience in the
       chromatography field suited to meet customer’s requirements. This is particularly the
       case for SUT skids. One customer explained that they might compete in “[o]nly for
       stainless steel fabrications where we will supply the design. But they have very
       limited ability to compete in the pilot and smaller scales as a high level of
       automation is required and they cannot compete with the software packages from
       GE”.276
(391) Finally, respondents to the market investigation do not expect additional companies
       to start supplying chromatography skids (either stainless steel or SUT) in the next
       two to three years, because of costs, technologies and entry barriers such as
       regulatory timing.277
(392) Because of this elimination of suitable alternatives, a majority of respondents who
       expressed an opinion on this point expect negative impacts on competition a regards
       chromatography skids, both for stainless steel and SUT, notably price increases. As
       explained by a university customer, “[i]n the first few years, not many/any company
       will be able to provide the products (with the same quality). Some companies will
       then increase their prices”. Another customer put forward that “[c]ombining GE and
       Danaher will impact on the overall market for bioprocessing skids (chrom & TFF)
273 Questionnaire Q1, question F.D.A.1.
274 Questionnaire Q1, question F.D.A.2.
275 Questionnaire Q1, question F.D.A.2.
276 Questionnaire Q1, question F.D.A.3.
277 Questionnaire Q1, question F.D.A.4.
                                                76
 ---pagebreak---         as one of the major competitors will be removed from the bidding processes and not
        replaced”.278
(393) In light of the considerations in paragraphs (387) to (392) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or EEA-
        wide market for stainless steel chromatography skids, as well as in the worldwide or
        EEA-wide market for SUT chromatography skids, the Transaction will give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects.
4.6.3.2. Continuous chromatography skids
        (A)       Market shares and the Notifying Party’s views
(394) As regards continuous chromatography skids, the Notifying Party has estimated its
        combined market shares at worldwide level at [30-40]-[40-50]% (with an increment
        from GE of [10-20]%) and at EEA-level at [20-30]-[40-50]% (with an increment of
        less than [0-5]%). The Notifying Party has identified as alternative suppliers
        Novasep ([10-20]% at world-wide and EEA level), Chromacon ([10-20]% at both
        levels) and Semba ([0-5]% at both levels).
(395) The Notifying Party therefore submits that the combined entity’s share of the
        continuous chromatography skids area will be moderate and not exceed [40-50]%
        worldwide or in the EEA. According to Danaher, a combined Danaher/GE
        Biopharma will face competition from three current suppliers – […] – and customers
        will, thus, continue to have the choice between a number of suppliers of continuous
        chromatography skids with an established product offering on the market. Danaher
        also submits that given the rather low barriers to enter the continuous
        chromatography skids area, there are a number of suppliers who are on the verge of
        entering or at least likely to enter the market, like Merck-Millipore or Sartorius.
        (B)       Commission’s assessment
(396) The Commission takes the view that in light of the replies from the market
        investigation, the Transaction would eliminate the most important source of rivalry
        in the continuous chromatography skids market, creating a new market leader with a
        share twice as high at its nearest rival, with little prospects of new entry and potential
        negative impact on conditions of supply in the continuous chromatography skids
        market
(397) In particular, customers having responded to the market investigation have indicated
        that in that regard GE would be the closest substitute to Pall and that therefore the
        Transaction would eliminate a significant alternative to Danaher in continuous
        chromatography skids. As explained by one customer, “[t]echnology assessments
        show these suppliers (Pall and GE) as potential competitors for this technology”.279
        Another customer put forward that “SEMBA and CHROMACON are small players
        and wouldn’t be considered as credible partners in large biopharma companies”.280
278 Questionnaire Q1, question F.D.A.5.
279 Questionnaire Q1, question F.D.E.2.
280 Questionnaire Q1, question F.D.E.2.
                                                    77
 ---pagebreak---         A third customer explained that there are “[l]imited number of major vendors in this
        space. Danaher purchased one of the major supplier Tarpen a few years ago”.281
(398) Moreover, respondents to the market investigation do not expect additional
        companies to start supplying continuous chromatography skids in the next two to
        three years – rather established suppliers in other fields could grow in this market
        through acquisition, as claimed by one customer. “The matter is complex, and
        barriers are high, we expect that the existing small players will be acquired by resin
        providers or by TFS, MM or Sartorius”.282
(399) Because of this elimination of suitable alternatives, some customers expect negative
        impacts on competition a regards continuous chromatography skids, notably price
        increases and elimination of one product range, although the future appears at this
        stage highly uncertain. As explained by one customer, “[t]he merger may lead to
        discontinuation of either Pall or GE’s continuous system offering, which may reduce
        market competition and potentially increase the pricing. But the two players may
        leverage each other’s IPs and further improve their product features and
        capabilities”.283
(400) In light of the considerations in paragraphs (396) to (399) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or EEA-
        wide market for continuous chromatography skids, the Transaction will give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects.
4.6.3.3. Chromatography columns
        (A)       Market shares and the Notifying Party’s views
(401) As regards chromatography columns, the Notifying Party has estimated its combined
        market shares at worldwide level at [40-50]% (with an increment from Danaher of
        [5-10]%) and at EEA-level at [30-40]-[40-50]% (with an increment of [0-5]%). The
        Notifying Party has identified as alternative suppliers Merck Millipore ([10-20]% at
        world-wide and [10-20]% at EEA level) and Novasep ([0-5]% at both levels). The
        overlap in pre-filled columns is minimal ([0-5]%).
(402) The Notifying Party therefore submits that the combined entity’s share of the
        chromatography columns will be moderate and not exceed [40-50]% worldwide or in
        the EEA. According to Danaher, customers will continue to have a choice between
        multiple suppliers, and the combined entity will continue to face effective
        competition from these suppliers. Danaher also submits there are also no substantial
        barriers that would prevent new suppliers from entering the columns segment.
        (B)       Commission’s assessment
(403) The Commission takes the view that in light of the replies from the market
        investigation, the Transaction would eliminate the most important source of
        competitive interaction in the chromatography columns market, creating a new
        market leader with a share at least twice as high at its nearest rival (and possibly
281 Questionnaire Q1, question F.D.E.2.
282 Questionnaire Q1, question F.D.E.3.
283 Questionnaire Q1, question F.D.E.4.
                                                  78
 ---pagebreak---         much above), with little prospects of new entry and potential negative impact on
        conditions of supply in the continuous chromatography skids market
(404) Similarly to chromatography skids, the internal document showed in paragraph (387)
        chromatography skids, would tend to indicate that the combined share is higher than
        what Danaher submits, in the area of [80-90]% for columns.
(405) Customers having responded to the market investigation have indicated that in that
        regard Pall would be the closest alternative to GE and that therefore the Transaction
        would eliminate a significant alternative to GE in columns. As explained by one
        customer, “[f]or some applications, there will be no alternatives”. Another customer
        put forward that “[o]fferings available from alternative suppliers however Danaher
        and GE are 2 of the top 3 suppliers of industrial columns so potential to restrict
        choice”.284
(406) Moreover, respondents to the market investigation do not expect additional
        companies to start supplying chromatography columns in the next two to three years,
        because, as explained by one customer, “[i]t takes a long time to get into market and
        create supply channels etc. so unlikely to be new entrants in timeline above”.285
(407) Because of this elimination of suitable alternatives, a majority of respondents who
        expressed an opinion on this point expect negative impacts on competition a regards
        chromatography columns, notably price increases. As explained by one customer,
        “[i]f there are not many suppliers, the prices could increase and the quality could
        decrease. The security of supply could be decrease as well, if there are not many
        suppliers”.286
(408) In light of the considerations in paragraphs (403) to (407) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or
        EEA-wide market for chromatography columns, the Transaction will give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects.
4.6.3.4. Chromatography resins
        (A)       Market shares and the Notifying Party’s views
(409) As regards resins, the Notifying Party has provided market shares at worldwide and
        EEA level in the table below.
284 Questionnaire Q1, question F.D.B.2.
285 Questionnaire Q1, question F.D.B.3.
286 Questionnaire Q1, question F.D.B.4.
                                                  79
 ---pagebreak---                                              Danaher               GE             Combined
      Protein A resins        Worldwide        [0-5]%       [50-60]-[60-70]%   [50-60]-[60-70]%
      (affinity resins)          EEA           [0-5]%       [50-60]-[70-80]%   [50-60]-[70-80]%
                              Worldwide        [0-5]%       [60-70]-[70-80]%   [60-70]-[70-80]%
   Non Protein A resins
      (affinity resins)          EEA          [5-10]%      [60-70]-[70-80]%    [70-80]-[80-90]%
                              Worldwide        [0-5]%       [50-60]-[60-70]%   [50-60]-[60-70]%
    Ion exchange resins
                                 EEA           [0-5]%       [50-60]-[60-70]%   [50-60]-[60-70]%
                              Worldwide       [5-10]%       [50-60]-[60-70]%   [60-70]-[70-80]%
    Mixed mode resins
                                 EEA         [10-20]%           [50-60]%       [60-70]-[70-80]%
(410) As regards Protein A resins, the Notifying Party submits that Danaher does not
          manufacture Protein A, and its activities in this segment are limited to the resale of
          small amounts of Protein A [Danaher’s market shares and sales as well as
          contractual relationship].
(411) For other resins, Danaher submits that it is only a minor supplier and by no means a
          close competitor to GE Biopharma. In any event, the Notifying Party submits
          customers post-Transaction will continue to have a choice between several viable
          alternative suppliers that are all established players in the chromatography segment,
          including Merck Millipore, Bio-Rad, Tosoh and Thermo Fisher.
          (B)        Commission’s assessment
(412) With market shares systematically [50-60]% and in some cases, [60-70]%, GE
          already holds a [GE’s market position] both at worldwide level and EEA level which
          [GE’s market position].
(413) In particular as regards Protein A, internal documents of GE show that GE is able to
          [GE’s price structure for Protein A] but also to the market position that it enjoys in
          the resin space, as shown in the graph below.287 Similar graphs have been produced
          by GE in relation to other types of resins.
[…]
(414) This […] in the resin field is also reflected in this internal document, which show the
          overall share of the resin business and demonstrates how GE is clearly ahead of all
          its rivals in resins.288
[…]
(415) Customers having responded to the market investigation have indicated that in that
          regard the Transaction would eliminate one of the few alternative to GE in resins. As
          explained by one customer, “[o]ur gmp production suites rely heavily on GE resins
          with minimal use of Thermo Fisher POROs AEX resin. Based on our R&D team’s
          experience, Thermo Fisher would be able to provide comparable performance of
          polishing resins (non-ProA), however ProA applications do not have a viable
287  DHR 66.
288  DHR 57.
                                                      80
 ---pagebreak---         substitute apart from GE. Additionally, regarding Thermo Fisher, we are unsure of
        their ability to commercially supply large quantities of polishing resins because we
        only have experience with procuring smaller quantities”.289
(416)    Consistent with such expectations of this elimination of one suitable alternative to
        GE resins, a majority of respondents who expressed an opinion on this point expect
        negative impacts on competition a regards resins, notably price increases.
(417) As regards affinity non-protein A resins, the Commission takes the view that the
        very high market share of GE ([60-70]%), combined with the elimination of the few
        alternatives, is likely to strengthen the [market position] of GE. This has been
        confirmed by a majority of respondents to the market investigation having expressed
        an opinion on this point.
(418) As regards ion exchange resins, the Commission takes the view that the very high
        market share of GE ([50-60]%), combined with the elimination of one of the few
        alternatives, albeit small, is likely to strengthen the [market position] of GE. This has
        been confirmed by a majority of respondents to the market investigation having
        expressed an opinion on this point.
(419) As regards mixed-mode resins, the Commission takes the view that the very high
        market share of GE ([50-60]%), combined with the elimination of the few
        alternatives, with a non-negligible market share, is likely to strengthen the [market
        position] of GE. This has been confirmed by a majority of respondents to the market
        investigation having expressed an opinion on this point.
(420) The Commission, however, also notes that Danaher’s position specifically regarding
        Protein A has been […] and that its […].290 Thus, while there was a […] in relation
        to Protein A […], this horizontal overlap no longer exists.
(421) In light of the considerations in paragraphs (412) to (420) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or
        EEA-wide markets for non-Protein A affinity resins, ion exchange resins and
        mixed-mode resins, the Transaction will give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement due
        to horizontal non-coordinated effects.
4.6.3.5. Membrane chromatography
(422) The Transaction does not lead to the combination of actual suppliers of membrane
        chromatography as GE Biopharma is essentially not active in the supply of
        membrane chromatography. While GE Biopharma is party to a distribution
        agreement […] under which GE Biopharma resells […] chromatography
        membranes, revenues derived from such resales were […], accounting for [0-5]% of
        worldwide and EEA-wide total sales of chromatography membranes.291
(423) Danaher on the other hand has a combined share of [20-30]% while the market
        leader is Sartorius with [50-60]% share at both worldwide and EEA level.
        Accordingly, the Transaction does not affect the structure of supply of membrane
289 Questionnaire Q1, question F.D.C.2.
290 Form CO, paragraph 1880.
291 […].
                                                     81
 ---pagebreak---         chromatography and customers have not expressed concerns as regards the impact of
        the transaction in membrane chromatography.292
(424) In light of the considerations in paragraphs (422) to (423) above as well as all
        evidence available to it, the Commission concludes that, in the worldwide or
        EEA-wide market for membrane chromatography, the Transaction will not give rise
        to serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects.
4.7.    Integrated solutions
(425) ‘Integrated solutions’ constitute a relatively nascent, dynamic and diverse offering
        for which there does not appear to be a generally agreed or common definition at this
        point in time. It encompasses the sale as a single product of a diverse range of
        combinations of multiple components, equipment and systems of the bioprocessing
        workflow together with related services, such as biomanufacturing process design,
        systems and process automation, and project management.
(426) Integrated solutions seem to be appealing in particular to smaller or less
        sophisticated customers for which time to market and a single point of contact
        provide greater value than the needed investment to optimise yield with a choice of
        the best technical fit for each bioprocessing product.293 Their sales are forecast to
        increase significantly in the coming years.
(427) In that regard, key customer groups appear to be small biotechnology companies
        (notably those active in cell and gene therapy), firms with projects in emerging
        markets (notably China) or to produce biosimilars, as well as contract development
        and manufacturing organisations (‘CDMOs’).
(428) More generally, integrated solutions seem to contribute to a broader trend for greater
        standardisation and use of platforms, but also a parallel trend for more customised
        and flexible production in view of more individualised therapies.
4.7.1. Market definition
4.7.1.1. Product market definition
(429) The Commission has not previously dealt with cases in the area of integrated
        solutions.
(430) Depending on the supplier and specific sale opportunity, integrated solutions in
        particular involve multiple components, equipment or systems in (i) a single step of
        the manufacturing process; (ii) two or more steps in either of the upstream or
        downstream process; (iii) two or more steps across both upstream and downstream
        processes; (iv) a complete factory line module; or (v) a working biomanufacturing
        facility.
(431) Different integrated solutions may also be split between, among others,
        (i) manufacturing platforms (upstream, downstream or both); (ii) full prefabricated
292 Questionnaire Q1, question F.D.D.4.
293 Form CO, paragraphs 3593, 3616 and 3705-3707.
                                                   82
 ---pagebreak---         manufacturing facilities; and (iii) associated services such as process development
        services, plant design or construction, and contract manufacturing.
(432) Given their diversity of content, the Parties view integrated solutions as a marketing
        initiative set up internally by suppliers to enhance individual product sales – rather
        than responding to a discrete customer demand – that cannot properly be defined as a
        distinct relevant product market.294
(433) On the contrary, the large majority of customers and competitors who expressed an
        opinion on this point indicated in their responses to the market investigation that
        integrated solutions would constitute a product that is distinct from the sum of its
        components.295
(434) Similarly, at least the Parties have teams, brands, reporting channels, strategic
        presentations and marketing material dedicated to integrated solutions. Moreover,
        integrated solutions are offered [Parties’ price structure].296
(435) In this light, and considering all available information in the file, for the purposes of
        this decision, the Commission considers that there is a differentiated market
        including all integrated solutions as opposed to several distinct relevant product
        markets to meet identified customer needs within a broader integrated solutions area,
        for instance upstream or downstream manufacturing platforms. The Transaction does
        not give rise to serious doubts as to its compatibility with the internal market or the
        functioning of the EEA Agreement in this product market.
4.7.1.2. Geographic market definition
(436) Integrated solutions are sales of bioprocessing equipment and associated products
        and services to customers in several regions of the world, mainly by suppliers active
        globally.
(437) There do not appear to be significant differences in the conditions of competition
        across geographies compared to those for bioprocessing products generally, which
        are the components of integrated solutions, as described for instance in
        section 4.2.1.1(B).
(438) Accordingly, there are indications that the relevant geographic market for integrated
        solutions could be global or at least EEA-wide.
(439) For the purposes of this decision, it can be left open whether the market for
        integrated solutions is global or EEA-wide in scope. The Transaction does not give
        rise to serious doubts as to its compatibility with the internal market or the
        functioning of the EEA Agreement under any of these plausible geographic market
        definitions.
294 Form CO, paragraphs 3472 and 3591.
295 Questionnaire Q1, question H.3 and questionnaire Q3, question H.1.
296 See for instance GE 285, GE 290, DHR 443 and DHR 555 to DHR 558.
                                                       83
 ---pagebreak--- 4.7.2. Competitive assessment
4.7.2.1. Horizontal overlaps
(440) Danaher (through Pall) has since 2018 supplied ‘Integrated Solutions’ – [Danaher’s
        sales strategy and marketing plans]. Pall advertises two Integrated Solutions
        platforms equipped with Pall hardware systems and consumables for upstream and
        downstream bioprocessing: (i) one for 2 000 litre monoclonal antibody batch
        processing; and (ii) another for adeno-associated virus vector production (used in
        gene therapy). It also sales a wide variety of more tailor-made solutions.297
(441) Danaher’s sales in Integrated Solutions (excluding associated services) amounted to
        approximately […].298
(442) GE supplies ‘Entreprise solutions’: (i) FlexFactory, an application-tailored
        manufacturing platform; and (ii) KUBio: a prefabricated configurable
        biomanufacturing facility. It also supplies (iii) Fast Trak Services such as process
        development. GE launched FlexFactory for gene therapy in October 2019.299
(443) GE’s sales in integrated solutions (only FlexFactory and KUBio) amounted to
        approximately USD […] in 2018 and USD […] to date in 2019.300
(444) Both Parties also offer some associated or other CDMO services such as process
        development.301
(445) Each of the Parties’ integrated solutions are largely built around their respective
        portfolio of proprietary products, although they are usually willing to incorporate
        components from competitors at the customer’s request and in any event do so to fill
        their own portfolio gaps.
(446) The Parties’ sales figures illustrate that, being a nascent market, integrated solution
        sales have been […]. It is not disputed, though, that they are forecast to […] in the
        coming years.
(447) The Parties argue that there are no competition concerns with regard to integrated
        solutions in spite of this horizontal overlap. In particular, the Parties submit that the
        merged entity would post-Transaction continue to be constrained by a number of
        competitors active in the supply of at least some elements of integrated solutions.
(448) In addition to the supply of individual bioprocessing products, suppliers such as
        Merck, Thermo Fisher and Sartorius would offer process development services and
        other services such as cell line development, facility design of equipment
        selection.302
(449) In particular, the Parties submit that Sartorius would offer bioprocess automation
        platforms, and Merck would offer end-to-end solutions under its BioReliance brand.
297 Form CO, chapter 9, B.I.
298 RFI 13, question 1.
299 Form CO, chapter 9, B.I. and submission on integrated solutions of 22 November 2019.
300 RFI 13, question 1.
301 Form CO, chapter 9, B.III.
302 Form CO, chapter 9, A.II.
                                                        84
 ---pagebreak---         Sartorius notably appears to have developed a 2 000 litre single-use mAb generic
        bioprocessing platform.303
(450) The Parties further submit that engineering firms would similarly be able to combine
        individual components sourced from bioprocess suppliers into custom-designed
        automated platforms to meet customer needs. The Parties notably list Jacobs, Cotter
        Brothers and ABEC as relevant firms.304
(451) Moreover, the Parties submit that, in a context where customers seek to procure the
        best product – from a technical perspective – for each step, a broad or even complete
        product portfolio is not a significant competitive advantage and suppliers of
        integrated solutions are constrained by mix-and-match procurement by customers
        from several suppliers.
(452) Finally, the Parties submit that the merged entity would continue to have significant
        portfolio gaps.
(453) The market investigation and the Parties’ internal documents confirmed that [GE’s
        market position and sales strategy].305
(454) The Parties’ internal documents suggest that among the four main competitors to GE
        in integrated solutions [Danaher’s market position and performance based on GE’s
        insight and intelligence].306 As noted above, Pall has been offering integrated
        solutions only since 2018.
(455) Consequently, the competitive change brought about by the Transaction in the
        current market for integrated solutions can be considered to be limited.
(456) [Danaher’s market position and performance based on GE’s insight and
        intelligence].307
(457) Moreover, [Danaher’s market position and performance based on GE’s insight and
        intelligence] in relation to GE needs to be considered in a context of a nascent and
        significantly growing market, in which no standard solution appears to have emerged
        yet, as submitted by the Parties.
(458) Indeed, Thermo Fisher (Brammer and Patheon) and Merck each have large CDMO
        divisions, which – the Parties submit – may be viewed by prospective customers of
        integrated solutions as competitive alternatives to setting-up in-house manufacturing
        capabilities.308 Other CDMOs such as Lonza, Wuxi, Boehringer Ingelheim and
        FujiFilm could also be perceived as offering competitive alternative solutions.
(459) Regarding other players, the market investigation overall confirmed engineering
        firms to constitute only second-tier alternatives.309 In particular, these firms would
        lack the crucial knowledge of bioprocessing products and processes to be able to
303 RFI of 22 November 2019, annex 1.
304 Form CO, chapter 9, A.II.4.
305 Questionnaire Q1, question H.5.1; questionnaire Q3, question H.3.1; GE 285; DHR 443.
306 GE 285, page 68.
307 GE 400.
308 Form CO, paragraphs 3603 and 3634.
309 Questionnaire Q1, question H.5.2 and questionnaire Q3, question H.3.2.
                                                        85
 ---pagebreak---         provide sufficiently tailored and good recommendations to customers. For this, they
        would need to revert to the product suppliers (on which they also vertically depend).
(460) The fact that several competitive alternatives may remain post-Transaction is
        confirmed by the fact that a majority of customers who expressed an opinion on this
        point does not expect the Transaction to have a negative impact regarding the market
        for integrated solutions, in particular on price.310 It should be noted, however, that a
        number of customers and a majority of competitors who expressed an opinion on
        this point are concerned with possible price increases.311 Some respondents also
        mentioned a negative impact on quality, choice, security of supply and innovation.
(461) Furthermore, the majority of customers in the bioprocessing industry are
        sophisticated firms, which may be able to adjust their behaviour to resist potential
        price increases.
(462) On balance, it appears that a sufficient number of competitive alternatives to the
        merged entity in integrated solutions would remain in place post-Transaction, at least
        for the majority of customers.
(463) In light of the considerations in paragraphs (440) to (462) as well as all evidence
        available to it, the Commission concludes that, in the worldwide or EEA market for
        integrated solutions, the Transaction will not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement with
        regard to horizontal non-coordinated effects.
4.7.2.2. Non-horizontal overlaps
(464) The Transaction also gives rise to non-horizontal overlaps in the area of integrated
        solutions since bioprocess equipment is an input for the supply of integrated
        solutions to customers. Against this background, the Commission assessed whether
        the Transaction could lead to input or customer foreclosure in relation to integrated
        solutions.
(465) On the one hand, with respect to customer foreclosure, some competitors and
        customers who expressed an opinion on this point appear to be concerned with the
        possibility that the merged entity would no longer purchase products from its
        competitors to incorporate into its own integrated solutions – thereby foreclosing
        significant revenues from competitors).312
(466) With respect to possible customer foreclosure, the Commission firstly notes that
        while being a growing market, integrated solutions only constitute a small share of
        the overall bioprocessing market. Significant single product demand will remain post
        Transaction, which remains accessible for competing producers of bioprocessing
        hardware and consumables. In other words, even if competitors could no longer sell
        components to the merged entity for incorporation into integrated solutions to be
        sold to customers, they would continue to sell their products directly to customers.
        These direct sales account for the vast majority of their current sales, and will likely
310 Questionnaire Q1, question H.10.
311 Questionnaire Q1, question H.10 and questionnaire Q3, question H.9.
312 Questionnaire Q1, question H.8 and questionnaire Q3, question H.7.
                                                       86
 ---pagebreak---         continue to do so in the coming years. It thus seems unlikely that the Parties’
        competitors could significantly be foreclosed from bioprocessing markets overall.
(467) Moreover, it appears that the incorporation of components from competing
        bioprocess suppliers into a given player’s integrated solutions are limited. Such is
        certainly the case for the Parties, [Parties’ sales strategies].
(468) This indicates that the merged entity would not have the ability to engage in
        customer foreclosure by not incorporating its competitors components into its own
        offering of integrated solutions.
(469) On the other hand, with respect to input foreclosure, customers do not appear to
        identify it as a concrete concern.313
(470) Indeed, the fact that there is only limited use of components from competing
        bioprocess suppliers into a given operator’s integrated solutions, is consistent with a
        finding of lack of ability to foreclose inputs.
(471) In light of the considerations in paragraphs (464) to (468) as well as all evidence
        available to it, the Commission concludes that, in the worldwide or EEA market for
        integrated solutions, the Transaction will not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement due
        to non-horizontal non-coordinated effects.
4.7.2.3. Conclusion
(472) In light of the above considerations, the Commission concludes that the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market or
        the functioning of the EEA Agreement in the possible worldwide or EEA-wide
        market for integrated solutions due to either horizontal or non-horizontal non-
        coordinated effects.
4.8.    Coordinated effects
(473) The Notifying Party submits that tacit coordination in any of the bioprocessing
        product markets would be unlikely because (i) pricing policy is not transparent;
        (ii) prices are less of a focal point as customers focus more on quality, expertise, and
        supply chain reliability; and (iii) major suppliers in bioprocess filtration have
        unbalanced and varying market positions, market shares and business models,
        limiting their ability to come to an understanding or to discipline others’ behaviour.
(474) The market investigation did not reveal concerns of customers or competitors
        regarding coordinated effects in any of the bioprocessing markets.314 The Notifying
        Party’s arguments are supported by respondents to the market investigation that take
        a position. A majority of customers that take a position indicate that effective prices
        are generally not known among market participants, that products are rather
        differentiated, and that they have not observed coordination in the industry.
(475) The Commission has furthermore not received evidence that would support the
        finding of coordinated effects of the proposed Transaction.
313 Questionnaire Q1, question H.9 and questionnaire Q3, question H.8.
314 Questionnaire Q1, questions J.1, J.2, and J.3 and questionnaire Q3, question J.2.
                                                          87
 ---pagebreak--- (476) On this basis, the Commission concludes that the Transaction does not give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to coordinated effects.
4.9.    Conglomerate effects involving bioprocessing products
4.9.1. Introduction
(477) Conglomerate mergers are mergers between firms that are in a relationship which is
        neither purely horizontal (as competitors in the same relevant market) nor vertical
        (as supplier and customer). In practice, the focus is on mergers between companies
        that are active in closely related markets (for example mergers involving suppliers of
        complementary products or of products that belong to a range of products that is
        generally purchased by the same set of customers for the same end use). This
        Transaction exhibits such a feature as most customers purchase complementary
        products from the Parties for the same bioprocessing operation. For example, some
        customers purchase GE chromatography products and Danaher/Pall filters for their
        bioprocessing operations.
(478) The Commission Guidelines on the assessment of non-horizontal mergers (“Non-
        Horizontal Merger Guidelines”)315 recognise that “conglomerate mergers in the
        majority of circumstances will not lead to any competition problems,” while noting
        that “in certain specific cases there may be harm to competition”316 In particular, the
        Non-Horizontal Merger Guidelines indicate that the “main concern in the context of
        conglomerate mergers is that of foreclosure”.317 They also stress that the
        combination of products in related markets is “a common practice that often ha[s]
        no anticompetitive consequences” because companies engage in such practices “in
        order to provide their customers with better products or offerings in cost-effective
        ways”.318
(479) Nevertheless, in certain circumstances, this practice “may lead to a reduction in
        actual or potential rivals’ ability or incentive to compete. This may reduce the
        competitive pressure on the merged entity, allowing it to increase prices”.319 In
        particular, “[i]n order to be able to foreclose competitors, the new entity must have a
        significant degree of market power, which does not necessarily amount to
        dominance, in one of the markets concerned”.320
(480) The Non-Horizontal Merger Guidelines clarify the framework of assessment of such
        practice: “[i]n assessing the likelihood of such a scenario, the Commission
        examines, first, whether the merged firm would have the ability to foreclose its
        rivals, second, whether it would have the economic incentive to do so and, third,
        whether a foreclosure strategy would have a significant detrimental effect on
315 Commission Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the
    control of concentrations between undertakings, OJ C 265, 18.10.2008, p. 6.
316 Non-Horizontal Merger Guidelines, paragraph 92.
317 Non-Horizontal Merger Guidelines, paragraph 93.
318 Non-Horizontal Merger Guidelines, paragraph 93.
319 Non-Horizontal Merger Guidelines, paragraphs 91 and 93.
320 Non-Horizontal Merger Guidelines, paragraph 99.
                                                        88
 ---pagebreak---        competition, thus causing harm to consumers. In practice, these factors are often
       examined together”.321
(481) In doing so, the Commission typically distinguishes three different types of
       practices: mixed bundling, pure bundling and tying. “Mixed bundling” usually refers
       to a situation where a company offers and prices together, as a bundle, several
       products and, at the same time, offers and prices the same product individually.
       “Pure bundling” refers to a situation where a company offers and prices several
       products only together in a bundle, and does not offer them individually. Eventually,
       “tying” refers to a situation in which customers that purchase one good, the tying
       good; are also required to purchase another good, the tied good, from the same
       company, and not from alternative suppliers.
(482) These practices can be implemented through various means. Rebates, when made
       dependent on the purchase of other goods, may be considered a form of mixed
       bundling. Tying can take the form of technical tying, by which the tying product will
       only work with the tied one, or can result from contractual terms, which would
       specify that a customer purchasing the tying good undertakes only to purchase the
       tied good from the samizee company.
(483) In the course of its investigation, the Commission received two complaints partly or
       entirely focused on conglomerate effects. One complainant explained that “[i]n the
       therapeutic pipeline dimension, [… it] is concerned that because GE’s ÄKTA™
       purification chromatography platform dominates the market as a process
       development tool, the potential combination of Danaher’s technologies with that
       platform could represent a limitation of customer choice at exactly the point where
       customers are locking in their product choices for future production. This potential
       bundling would prevent other suppliers from competing in the pipeline” (original
       emphasis).322
(484) Another complainant expressed concerns that “the merged entity would force it to
       purchase Danaher’s chromatography filters alongside GE’s Protein A resin. […]
       GE does not manufacture chromatography filters, and [the complainant] currently
       has a choice between Danaher and Sartorius as the two viable suppliers of these
       specific filters. Therefore, such a bundling and tying strategy would foreclose
       Sartorius and leave with no choice in chromatography filters. [The complainant] is
       also concerned about such bundling and tying and the consequent foreclosure effect
       more broadly, for example, for other filters and related consumables”.323 These
       concerns arise “from the must-have nature of GE’s Protein A”.324 This complaint
       was supported by an economic model commissioned to Oxera entitled “Analysis of
       the incentives of the merged entity to bundle” (“Oxera report”) that aimed at
       assessing “the merged entity’s incentives to adopt different bundling strategies, in
       light of their market shares and margins from different products”.325
(485) For the convenience of the description, this decision assesses separately possible
       anticompetitive effects resulting from bundling practices and from (technical) tying
321 Non-Horizontal Merger Guidelines, paragraph 94.
322 Doc ID474.
323 Report entitled “Analysis of the incentives of the merged entity to bundle” (Doc ID2571), paragraph 1.2.
324 Report entitled “Analysis of the incentives of the merged entity to bundle” (Doc ID2571), paragraph 1.3.
325 Oxera report (Doc ID2571), paragraph 1.7 as well as sections 2 and 3.
                                                          89
 ---pagebreak---         practices. In doing so, the Commission assesses the ability and the incentives of the
        merged entity to engage in such practices post-Transaction.
4.9.2. Bundling
(486) The Notifying Party argues that the Transaction will not give rise to anticompetitive
        conglomerate effects. The arguments put forward to support this conclusion are, in
        summary, the following:326 (i) none of the Parties currently bundle products to any
        substantive extent; (ii) the merged entity will not have the ability to foreclose rival
        suppliers through bundling; (iii) the merged entity will not have the incentives to
        foreclose rivals through bundling; and (iv) a foreclosure strategy through bundling
        would not succeed in producing anticompetitive effect.
(487) In order to assess the likelihood of anticompetitive conglomerate effects and test the
        Notifying Party’s arguments, the Commission conducted an extensive investigation
        related to the ability and incentive by the merged entity to engage in such practices.
        It held numerous interviews with customers and competitors, including the two
        complainants, in particular, in order to verify the claims made by these market
        participants and the Parties. A market investigation has been carried out by means of
        written questionnaires pursuant to Article 11(2) of the EUMR. The Commission
        further obtained non-confidential versions of the above-mentioned complaints and
        provided the Notifying Party with an opportunity to comment on them.
(488) As a starting point, the Commission considers that with market shares systematically
        [50-60]% and in some cases, [60-70] or even [70-80]%, GE already holds both at
        worldwide level and EEA level a [market position] in the various types of
        chromatography resins, which is at this stage indicative of [GE’s market position] –
        see paragraph (412). Thus, it has to be assessed whether post-Transaction, the
        merged entity would have the ability and the incentives to leverage [GE’s market
        position]. The Commission understands that chromatography is used in downstream
        bioprocessing, which uses different forms of biofiltration processes. Thus, the
        Commission considers that these markets can be considered as closely related and
        are therefore the most likely candidates for bundling practices. Moreover, as
        mentioned above, one of the complainants voiced the fear that the merged entity
        would engage in bundling its chromatography resins, in particular protein A, with
        chromatography filters or other types of filter consumables used in the downstream
        process.
4.9.2.1. Ability to bundle
(489) In this respect, the Notifying Party firstly submits that none of the Parties currently
        bundle products to any substantive extent. While each of the Parties offer and sell
        multiple products to their customers, and therefore would be in a position to bundle
        some of these products, “the Parties do not engage in contractual bundling, nor do
        they offer as a matter of policy discounts conditional on the customer buying
        multiple products”, resulting [Parties’ sales strategy].327
326 Form CO, chapter 10.
327 Form CO, paragraphs 3739 and 3740.
                                                   90
 ---pagebreak--- (490) Secondly, despite [GE’s market position], according to the Notifying Party, the
       merged entity will not have the ability to foreclose rival suppliers through bundling
       for the following reasons:328
       (a)     “There are no real ‘must have’ products in bioprocessing, making it difficult
               to leverage any strength from a market to another”;
       (b)     “Customers typically purchase products for each bioprocessing step
               separately, making it difficult to offer bundled sales”;
       (c)     “Bioprocessing procurement often involves independent decision makers
               across each step, which reduces the effectiveness of any bundling strategy”;
       (d)     “Customers often evaluate several competing solutions, resulting in intense
               competition in each bioprocessing step [and d]ecision-makers typically have
               strong preferences for sourcing the product best suited to their technical
               requirements, and are unlikely to change their decision in order to obtain a
               discount on another product”; and
       (e)     “Customers often make their selection decisions at different points in time,
               which [...] makes it difficult to bundle products”.
(491) As regards the lack of “must have”, the Notifying Party explains that, “[o]n an ex-
       ante basis, i.e. before the process for producing a biologic is specified, there are no
       ‘must have’ products, as – for each product – customers have multiple choices from
       credible vendors, typically including, in addition to the parties, ThermoFisher,
       Merck (MilliporeSigma), Sartorius and Repligen. Moreover, for specific areas there
       also exist more narrowly-focused venders […]”.329 GE thus “considers that there are
       credible ex-ante alternatives for its products”,330 even for the supply of Protein A
       resins where GE has high market shares and Danaher “considers that there is no
       product in Pass’s portfolio that is ex-ante a ‘must have’ product”.331
(492) The market feedback is inconclusive as regards the presence of must-have products,
       from either the Parties or their competitors. While a large number of customers who
       expressed an opinion on this point have listed several products as must-have, it
       appears that these have been interpreted as not interchangeable due to the lock-in
       effect that occurs for a large number of products once it has been selected for usage
       in the bioprocessing production process or once this process is set in place,
       irrespective of the market power of the supplier of that product and thereto
       applicable to any supplier of these products, as exemplified by statements such as:
       “[b]ecause the company is single source and it is difficult to switch supplier” or
       “[a]ll components have been qualified and are included in registered, commercial
       processes”. Other customers provide clearer statements on whether they consider the
       Parties’ products as must have: “there are no alternatives in term of performance”;
       or whether they do not: “there are other companies offering similar products”; “are
       considered must haves but not necessarily from the parties”; “[a]lthough it takes
328 Form CO, paragraph 3772.
329 Form CO, paragraph 3774.
330 Form CO, paragraph 3779.
331 Form CO, paragraph 3778.
                                                   91
 ---pagebreak---        time, the products are interchangeable”; “[n]one are truly unique and
       irreplaceable”; “[t]here are no ‘must have’ products in our view”.332
(493) As regards customers’ purchase patterns and procurement processes, the Notifying
       Party submits that customers typically purchase products for each bioprocessing step
       separately. In this regard, the Notifying Party submits customers’ business cases
       collected from the Parties showing that in […]% of cases, customers purchased
       separately in each step. The Commission notes however that it appears that […] of
       medium-sized customers in fact did not purchase all steps separately, although it
       generally also recognises that, given that the sample size is small (for customers
       overall and then naturally even more when segmenting), it is difficult to infer general
       conclusions from these business cases.333
(494) As for bioprocessing filtration and chromatography, which are Danaher and GE’s
       respectively strongest areas, the Notifying Party submits that such products are not
       often purchased together. [GE’s sales]. In addition, both areas mostly are represented
       [GE’s sales] (accounting for […]% and […]% by count respectively).334
(495) A majority of customers who expressed an opinion on this point confirmed that most
       purchases (or requests for quotations) concerned single products or products for a
       specific step in the bioprocessing production chain (for instance for chromatography
       hardware and consumables).335 This seems to validate the Notifying Party’s claim in
       this respect.
(496) The Notifying Party also argues that, typically, different actors are responsible for
       purchasing different products used in the bioprocessing production process. Large
       customers would have different technical teams for upstream and downstream
       processes, and may further differentiate across technologies.
(497) The market investigation, based on customer feedback, confirms that mostly
       different actors are responsible for the upstream and downstream processes, although
       mostly the same people are responsible within the upstream or downstream parts,
       and overall, in a majority of cases, there are persons/teams responsible for
       purchasing decisions for more than one step in the bioprocessing workflow.336 For
       bioprocessing filtration and chromatography products in specific, a large majority of
       customers who expressed an opinion on this point indicate that purchasing decisions
       are made by the same people/teams.337
(498) As regards customers’ evaluation and preferences, the Notifying Party stipulates that
       decision makers typically have strong preferences for sourcing the product that is
       best suited to their technical requirements and that price is not the primary factor in
       purchasing decisions. Customers evaluate a number of options. The financial impact
       of even a limited loss in productivity from using sub-optimal solutions would
       substantially outweigh any discount offered by suppliers as this could result in
332 Questionnaire Q1, questions B12 and B13.
333 Form CO, table 264.
334 Form CO, tables 260 and 261.
335 Questionnaire Q1, question B.4.
336 Questionnaire Q1, question B.5.
337 Questionnaire Q1, question B.6.
                                                  92
 ---pagebreak---        significant delays in the product coming to market, or in productivity losses.
       [Danaher’s sales strategy and customer preferences]338.
(499) The market investigation generally confirms this, as both customers and competitors
       who expressed an opinion on this point consider that product quality (including
       technical fit) and supply chain reliability are the most important purchasing
       parameters. The product price is clearly less important than those two parameters.339
(500) The importance of finding the best technical fit for a bioprocessing product is
       generally confirmed by customers and competitors who expressed an opinion on this
       point. Choosing a product with possibly lower productivity would unlikely be
       compensated by other gains (such as lower purchase price or discounts): “[q]uality
       and production yield typically outweigh any lower purchasing price offered”; “it is
       never compensated by other gains”; “[l]ower productivity has a much higher impact
       than reduced purchase price”; “[d]ifficult to assess. As standard, a loss in yield,
       even of less than 1% can impact costs more than a possible reduction in purchased
       material pricing. Time to market may not be a benefit if the product cost is higher
       due to lower yields”. This may however also depend on the particular case: “[t]rade
       offs are always evaluated. We judge each opportunity based on multiple factors than
       make the most business sense for a given situation”.340
(501) Aiming to purchase the “best in class” and maintaining flexibility are considered as
       the as drivers for the “mix-and-match” approach that today characterises the industry
       to some extent: “we are seeking the best solution for each element of the process”;
       “[t]his approach in based on the need of fitting the hardware in the manufacturing
       suite with the highest efficiency. Said efficiency depends on both economical and
       technical needs”.341 Indeed, customers and competitors who expressed an opinion on
       this point confirm that it is generally possible to combine hardware components from
       different suppliers, as well as hardware and consumables from different suppliers.342
(502) As regards the timing of purchasing decisions, roughly half of customers who
       expressed an opinion on this point indicate that decisions with regards to
       chromatography and bioprocessing filtration are made at a similar point in time.343
       This does not support the picture put forth by the Notifying Party, who claims that
       these decisions are typically been made at different points in time. The majority of
       the competitors who expressed an opinion on this point however support the
       Notifying Party’s view that the respective purchasing decisions are made at different
       points in time.344 The explanations provided vary significantly. That being said, from
       the market feedback, it appears that for chromatography, hardware is mostly chosen
       at the clinical or scale-up manufacturing stage, while consumables are mostly chosen
       at the drug discovery and pre-clinical stage. For DFF filtration, it seems that systems
       are typically chosen at the clinical or scale-up manufacturing stage, but customers
       and competitors do not agree on DFF consumables where customers say that these
338 Form CO paragraphs 3824-3825 and table 267: [Danaher’s sales strategy and customer preferences].
339 Questionnaire Q1, question B.1 and questionnaire Q3, question B.1.
340 Questionnaire Q1, question B.3 and questionnaire Q3, question B.3.
341 Questionnaire Q1, question B.9.1
342 Questionnaire Q1, question B.9 and questionnaire Q3, question B.9.
343 Questionnaire Q1, question B.6.2.
344 Questionnaire Q3, question B.6.2.
                                                       93
 ---pagebreak---        are also chosen at the clinical or scale-up manufacturing stage while competitors
       mostly say that these are chosen at the drug discovery and pre-clinical stage.345
(503) In light of the results of the market investigation, the Commission considers that the
       arguments of the Notifying Party appear pertinent as regards (i) the separate
       purchasing of different bioprocessing products; and (ii) the importance of quality and
       the “best technical fit” for purchasing decisions. The picture is however somewhat
       more mixed as regards the claims that (i) there are no real ‘must have’ products in
       bioprocessing; (ii) the identity of decision makers for purchasing decisions
       concerning the downstream processing comprising chromatography and filtration is
       different; and that (iii) those decisions are being taken at different points in time.
(504) In any event, a large majority of customers who expressed an opinion on this point
       indicates that the Parties or their competitors did not attempt to leverage must-have
       products to enhance sales of other products or to enforce less favourable contractual
       terms.346 This clearly supports the Notifying Party’s claim in this respect.
(505) Moreover, the Commission notes that overall, a majority of customers who
       expressed an opinion on this point does not consider that it would be a successful
       and profitable strategy for the merged entity to leverage GE’s market position in
       chromatography into other areas by conditioning the sale of chromatography
       products on the sale of other products (pure bundling). For example, a customer
       clarified that “[p]roducts even though they may be similar may not be identical to
       what customers already use or need and so technically this strategy would cause
       major issues and negative feedback to GE so it’s unlikely they would pursue it”
       Moreover, another customer indicated that: “[o]ur experience to date would suggest
       that the market would not support this strategy”. Another customer also emphasised
       that: “[w]e do not like to be locked into products because of unforeseen technical
       issues and/or price destabilization. So if there was some kind of tie between the
       current supply of GE’s chrom products to PALL’s product, this would be far too
       risky”.347
(506) Moreover, a majority of customers who expressed an opinion on this point would not
       accept the merged entity forcing them to buy all of the merged entity’s products for a
       certain production steps or the entire bioprocessing workflow, and state that, if faced
       with such situation, they would switch supplier. This seems to be driven by
       customers’ needs to be able to pick individual components from different suppliers
       that work optimally for their production process, as exemplified by the following
       statements:
       (a)      “I would not be pushed into using products for new processes which are not
                the most suitable for the process. As now we would test different skids and
                materials and choose the best ones for our process and product regardless of
                the supplier. If a company tried to force us to use only their products then we
                would avoid working with them unless they agreed that we can combine
                products from mutiple suppliers”;
345 Questionnaires Q1 and Q3, question B.7.
346 Questionnaire Q1, question I.2.
347 Questionnaire Q1, questions I.6.1, I.6.1.1, 1.6.2 and I.6.2.1.
                                                           94
 ---pagebreak---         (b)     “We only buy the products we are interested in because we want to use the
                most suitable product for each process. In new projects we would not accept
                requirements to force us to buy the full portfolio instead of just cherry
                picking the product we are interested in”;
        (c)     “We seek to source and implement technologies that offer best in class
                performance for our processes. We do not want to be tied to a single set of
                products from a single supplier that may not be the best performance for our
                process”;
        (d)     “For new processes there isn’t a typical constraint so we can choose
                alternative suppliers”;
        (e)     “We would resist any attempt to be influenced or directed to a single vendor
                option. However, the technical realities may be that in some cases we will
                have no option. In such instances we are likely to develop alternates over
                time to ensure we address any such vulnerabilities”;
        (f)     “We will rely on these suppliers and products for many years to come and we
                do not need to be forced into use of it’s products (or those of the merged
                entity). The supplier does not tell us what we can and cannot use nor do they
                have a way to enforce this. We would likely go to another supplier very
                quickly to avoid predatory behavior”348 (emphasis added).
(507) As regards mixed bundling, the Commission notes that a majority of competitors
        who expressed an opinion on this point takes the view that the merged entity could
        successfully leverage its position in chromatography into other areas by granting
        specific rebates. While also a majority of customers who expressed an opinion on
        this point considers that the merged entity could leverage its strength in
        chromatography by offering discounts on combined purchases of chromatography
        and filtration products, customers nevertheless indicate that the acceptance of this
        practice would be conditional on the technical fit of the products. This feedback is in
        line with the high importance of quality and best technical fit for purchasing
        decisions in the bioprocessing sector. Two major customers underline though that
        the selection of products does not only depend on price.349.350
(508) In light of the foregoing, and considering all elements in the file, the Commission
        considers that the merged entity will not have the ability to leverage its market
        position in chromatography resins by pure or mixed bundling practices.
4.9.2.2. Incentives to bundle
(509) According to the Notifying Party, the merged entity will not have the incentives to
        foreclose rivals through bundling. Indeed, according to the Notifying Party, “[t]he
        proportion of customers who would take the bundle [for example of Protein A resin
        and DFF consumables] is likely going to be limited […] given that many customers
        will have a strong preference for a ‘best of breed’ product which best suits their
        specific technical processing needs […]”.351 For these reasons, [GE’s price structure
348 Questionnaire Q1, questions I.7, I.7.1, I.8 and I.8.1.
349 Questionnaire Q1, questions I.6.2 and I.6.2.1.
350 Questionnaire Q1, question I.5.2.
351 Form CO, paragraph 3853.
                                                           95
 ---pagebreak---         and sales strategy]352 and [Danaher’s price structure].353 The Notifying Party
        concludes that [GE’s price structure and sales strategy].354
(510) This is generally confirmed in the market investigation. As indicated above in
        paragraph (500), customers and competitors who expressed an opinion on this point
        generally confirm the importance of finding the best technical fit for a bioprocessing
        product, with quality (including best technical fit) and supply chain reliability being
        considered by customers who expressed an opinion on this point to be more
        important than price considerations. Furthermore, competitors who expressed an
        opinion on this point also confirm the relatively high level of margins in
        chromatography resins and filtration consumables who indicated their margins for
        these products, as described in paragraph (529) below.
(511) However, a complainant submitted a report by Oxera assessing the incentives of the
        merged entity to bundle. The report “set[s] out an economic model of the merged
        entity’s incentives to adopt different bundling strategies, in light of their market
        shares and margins from different products. [It] focus[es] on the possibility of
        bundling of Danaher’s chromatography filters [referred to as ion exchange
        membrane in this decision] with GE’s Protein A (for new products)”.355
(512) The report compares the merged entity’s gains between the current situation, in
        which Protein A and ion exchange membranes are sold separately, and two different
        scenarii: a pure bundling scenario in which the merged entity would sell exclusively
        the two products in a bundle; and a specific mixed bundling scenario in which the
        merged entity would “increase the stand-alone price of Protein A in order to
        incentivise customers to buy the bundle with Danaher’s chromatography filters [that
        is, ion exchange membranes]”.356 In doing so, the report assumes that the merged
        entity has the ability to implement such strategies.
(513) In the complainant’s specific mixed bundling scenario, by increasing its price of
        Protein A, the merged entity would face the following trade-off between:357
        (a)       an increase in profits on the supply of Protein A from customers that will
                  maintain their purchase of Protein A from the merged entity and of ion
                  exchange membranes from a competitor;
        (b)       an increase of profits on the supply of ion exchange membranes, as some
                  customers that chose the merged entity’s Protein A and a competitor’s ion
                  exchange membrane will now buy the ion exchange membrane proposed in
                  the bundle; and
        (c)       a decrease in profits from customers deciding to select an alternative supplier.
352 Form CO, paragraph 3852.
353 Form CO, paragraph 3854.
354 Form CO, paragraph 3852.
355 Oxera report, paragraph 1.7.
356 Oxera report, paragraph 3.1.
357 In essence, the model analyses the marginal incentive for the merged entity to increase the stand-alone
    price of Protein A while keeping the price of the bundle at pre-merger levels. In particular, the model
    calculates an index that is similar to the Gross Upward Pricing Pressure Index (GUPPI), which is used to
    estimate the incentive of the merging parties to increase prices post-merger.
                                                           96
 ---pagebreak--- (514) The report estimates the overall gain that could be derived from this specific mixed
       bundling scenario and concludes that, for level of gross margins of 70-80% for
       Protein A and 50-70% for ion exchange membranes, and for market shares around
       90% for Protein A and 40-60% for ion exchange membranes, the merged entity
       would always have an incentive to engage into such practice.
(515) The Commission first notes that the specific mixed bundling scenario described by
       the complainant does not fully reflect the incentives of the merged entity for the
       pricing of these two products. This scenario assesses only the indirect unilateral
       effect resulting from the competition between the bundle and one of its component
       and it ignores the possible complementarity of the bundled products. For
       complementary goods, a reduction in price of one of the product will increase its
       demand as well as the one of its complement. As the merged entity would benefit
       from this increase in demand in the complementary good, it has an incentive to lower
       the price of such goods. When assessing mixed bundling practices for
       complementary goods, the economic literature supports the fact that the price of the
       bundle tends to decrease because of the internalization of their complementarity.
(516) Moreover, the Commission also notes that there are several assumptions and factors
       that drive these results, in particular: (i) the assumption that the commercial
       interactions between the merged entity and its customers are limited to these two
       products, and therefore gains and losses from such practices need to be assessed on
       these two products only; (ii) the assumption that the merged entity can price
       discriminate customers on the basis of the application they buy the products for;
       (iii) the assumption that the merged entity would price the bundle at the sum of pre-
       Transaction prices of the individual products, and therefore that the merged entity
       would not use the price of the bundle to optimise its strategy; (iv) the proportion of
       usage of Protein A and ion exchange membranes by customers, which is assumed to
       be one unit of Protein A for one unit of ion exchange membrane; (v) the level of
       diversion ratios for ion exchange membranes, which are assumed to be driven by the
       current level of market shares; and (vi) the level of profit margin earned on the ion
       exchange membranes.
(517) The Notifying Party commissioned Compass Lexecon to review both the pure
       bundling and mixed bundling scenario discussed in the Oxera report (“Compass
       Lexecon report”).358 For both the pure bundling and the specific mixed bundling
       scenario, the Notifying Party challenges most of the assumptions listed above.
(518) In particular, the Notifying Party disputes that, as assumed by the complainant, the
       merged entity would be able to “sell Protein A as a standalone product to a
       customer for processes which do not use ion exchange membranes, but would refuse
       to supply standalone Protein A to that same customer for processes which do use ion
       exchange membranes (instead insisting upon a tie of Protein A and ion exchange
       membranes)”.359 Indeed, this would require a drastic change in the contractual
       framework currently used by the Parties. It would also be “difficult for the merged
       entity to monitor the process in which specific purchases of Protein A were used, as
358 Compass Lexecon report “Comments on Oxera’s analysis of incentives to bundle”, dated 22 November
    2019 (Doc ID2595).
359 Compass Lexecon report, paragraph 4.5.
                                                  97
 ---pagebreak---          – absent inspection rights which the customers would be unlikely to grant – the
         merged entity would need to rely on the customer’s representation”.360
(519) In the absence of the ability to price discriminate, a pure bundling strategy would
         have to be implemented on all the merged entity’s sales of Protein A. In such
         context, using the model developed by the complainant but correcting the proportion
         of usage (in value) between Protein A and ion exchange membranes from 1.17 to 1,
         used by the complainant, to […], based on the relative value of these markets,361 the
         Notifying Party shows that there is no incentives to engage in pure bundling
         practices.
(520) The Commission indeed notes that the market for Protein A is significantly ([value
         of the market], worldwide) larger than that of ion exchange membranes.
(521) The Notifying Party also argues that “customers have significant buyer power and
         have the ability to retaliate against an attempt by the merged entity to tie or bundle.
         This is because customers purchase multiple products from GE and Pall, in each
         case with many viable alternatives”.362 In support of this submission, the Notifying
         Party “estimate[s] the proportion of the Parties’ sales which are at risk of retaliation
         by the customers” and shows that, “on average, [GE’s customers purchases and
         quantities sold].363 The Notifying Party indicates that this percentage is significantly
         understated due to data limitations.
(522) On the argument related to buyer power, the Commission notes that a significant
         share of the Parties’ revenues are made by few “large, highly knowledgeable, and
         sophisticated companies, often with strong global presence [: …] [Danaher’s
         customers purchases and quantities sold].364 Nevertheless, while these customers
         enjoy, by their characteristics, some level of buyer power, other customers, for
         example smaller or less knowledgeable customers, might not, arguably, benefit from
         similar level of buyer power.
(523) The Commission notes that, pre-Transaction, GE [GE’s market position] in
         chromatography resins (see section 4.6.3.4) and that GE’s product portfolio is
         already substantial. In particular, GE is also active in neighbouring markets of
         chromatography resins. Amongst those, the Notifying Party identifies five markets in
         which GE’s market shares and margins are similar to those of Danaher in the most
         likely candidates for bundling: ion exchange membranes and bioprocess filtration.365
         For example, GE supplies ion exchange resins, which can also be used for mAb
         polishing like ion exchange membranes. According to the Notifying Party, GE has a
         share of [50-60]-[60-70]% in ion exchange resins generally,366 with a worldwide
         market value of USD […] and a standard margin of […]%,367 while GE controls a
360 Compass Lexecon report, paragraph 4.6.
361 Compass Lexecon report, paragraph 4.1: “The Oxera paper does not account for the fact that the Protein
    A market is significantly larger than the market for ion exchange membranes. As described in the Form
    CO [in tables 129 and 145], [value of the market]. The Oxera paper’s analysis instead assumes that the
    ratio of the value of Protein A to the value of ion exchange membranes is 1.17:1”.
362 Compass Lexecon report, paragraph 2.11.
363 [GE’s customers purchases and quantities sold].
364 Form CO, paragraph 3881.
365 Compass Lexecon report, paragraphs 3.7-3.8 and annex 2.
366 Form CO, paragraph 1895 and Compass Lexecon report, paragraph 3.2.
367 Form CO, table 133 and Compass Lexecon report, paragraph 3.2.
                                                            98
 ---pagebreak---         […] share in ion exchange resins used for mAb polishing. Against this background,
        GE368 and GE’s customers who expressed an opinion on this point369 state that GE
        does not currently engage in bundling practices. Therefore, pre-Transaction, GE does
        lack the ability and/or the incentives to bundle its products in the bioprocessing
        sector for all its customers.
(524) The Transaction will bring together GE’s product portfolio and Danaher’s product
        portfolio. As indicated in paragraph (488) above, the most likely candidates for
        bundling practices are chromatography filters or other types of filter consumables. In
        these markets, Danaher has similar market positions and margins than GE currently
        enjoys other closely related markets. As GE lacks the ability and/or incentives to
        engage into bundling practices on these closealy related markets, it is likely that the
        merged entity will also lack the ability and/or incentives to engage in bundling GE
        chromatography resins and chromatography filters and other types of filter
        consumables.
(525) In light of the foregoing and all information available to it, the Commission
        considers that the merged entity will not have the incentives to leverage its market
        position in chromatography resins by pure or mixed bundling practices.
4.9.2.3. Effect on competition
(526) The Notifying Party submits that a foreclosure strategy through bundling would not
        succeed in producing anticompetitive effects by reference to the following
        elements:370
        (a)      “existing rivals have counted-strategies available to them”;
        (b)      “customer’s buyer power would prevent any anticompetitive effect from
                 materialising”; and
        (c)      “a tying or bundling strategy could not force rival suppliers out of the
                 market”.
(527) In particular, as regards the rival’s counter-strategies, the Notifying Party notes that
        “Sartorius and Merck Millipore have more complete offerings than the Parties and
        could therefore offer competing bundles of products”.371 According to the Notifying
        Party, Sartorius has announced to the public to provide “complete offerings in
        filtration, fluid management and fermentation, a 25% complete offering in
        purification and a 75% complete offering in cell culture media […and the Parties]
        would thus be in a similar or less complete position compared to Sartorius and
        Merck”.372
(528) The above submissions are consistent with the findings from the Commission’s
        investigation. In particular, several of the merged entity’s competitors offer a large
        portfolio of products in the bioprocessing sector. This suggests that they could
368 Form CO, paragraph 3765 and Compass Lexecon report, paragraphs 3.1-3.2.
369 Questionnaire Q1, question I.2.
370 Form CO, paragraph 3857.
371 Form CO, paragraph 3860.
372 Form CO, paragraphs 3862-3863.
                                                   99
 ---pagebreak---         provide competing bundles to the merged entity, should the merge entity engage into
        such practice.
(529) The Commission also notes that suppliers in this industry experience high levels of
        profit margins for chromatography resins and filtration consumables.373 Such level
        of margin generally appears to be sufficiently high to leave margin for rebates, in
        particular should the merged entity engage in bundling practices.
(530) Moreover, the Commission notes that several respondents to the market
        investigation also indicated that competitors to the merged entity could resort to
        improving quality and reducing prices as a counterstrategy that would reduce the
        attractiveness of any bundles by the merged entity. As one customer put it,
        competitors could offer “products or services that are competitive technically and in
        price”. Another customer explained that “best ways will be to increase innovation
        and be less expensive”.374 Similarly, several competitors considered the focus on
        higher quality product as a key element for a counter strategy. According to a
        competitor, competition was possible “[b]y developing and supplying superior
        performance products”.375 Another competitor explained: “Small to medium sized
        companies can compete with better service, support lead times and last but not least
        better performing products with lower cost of ownership”.376
4.9.2.4. Conclusion on bundling
(531) In light of above considerations as well as all evidence available to it, the
        Commission concludes that the Transaction does not give rise to serious doubts as to
        its compatibility with the internal market or the functioning of the EEA Agreement
        with regard to conglomerate effects from pure and mixed bundling.
4.9.3. Technical tying
(532) When a supplier engages in tying practices, customers who purchase a (tying) good
        are also required to purchase another good (the tied good). Typically, the tying good
        would be a product in which the seller has a strong market position which it tries to
        leverage to market of the tied good.
(533) For the Notifying Party, the merged entity will not have the incentive to foreclose
        rival suppliers through tying.377 Its arguments are, overall, similar to those it makes
        in respect to bundling. The Notifying Party also notes that “the large majority of
        conventional bioprocessing products are interoperable, and the scope for any
        potential technical tying is very limited. In particular, the only conventional
        products that are not agnostic regarding the supplier of complements are, typically,
        consumables bags for bioreactors and mixers, and flow kits for single use
        chromatography skids and filtration systems”.378
373 Questionnaire Q3, question I.1.
374 Questionnaire Q1, question I.6.3.
375 Questionnaire Q3, question I.5.3.
376 Questionnaire Q3, question I.5.3.
377 Form CO, chapter 10, sections C, D, E and F.
378 Form CO, paragraph 3731.
                                                  100
 ---pagebreak--- (534) The Commission received a complaint related to tying practices in relation to
       Unicorn, GE’s proprietary operating software which is common to GE’s Äkta
       product offering.379
(535) The Commission notes that the areas where the Parties are active are characterised
       by a large degree of interoperability, both in between product areas as well as
       between hardware and consumables. This seems to be driven by the “mix-and-
       match” approach by customers who aim to purchase the “best in class” products that
       accommodate their needs for individual steps of the bioprocessing workflow (as
       described in paragraph (501)). On the basis of this and absence of other evidence that
       would suggest the contrary, the Commission does not find general concerns for
       technical tying. As regards merger specificity, the Commission notes that the
       proposed Transaction brings together GE’s strength in chromatography with
       Danaher’s portfolio of bioprocessing filtration. Given also the specific complaint in
       this regard, the Commission has further assessed this area. This section will focus on
       the assessment of the possible technical tie of lab-scale chromatography and
       filtration systems.
(536) The usage of chromatography resins and columns require customers to program a
       chromatography method. [GE’s products and know-how]. For process scales, while
       the consumables may be different, the technologies are identical, and in turn can also
       influence the choice of large scale systems.
(537) According to the complainant, GE has a very strong position in lab-scale
       chromatography systems and it has leveraged this strength in lab-scale systems. This
       resulted, according to the complainant, in GE obtaining very high market shares in
       chromatography consumables and hardware. Post-Transaction, the complainant
       argues that the merged entity would extend these practices to Danaher’s filtration
       offering in the lab-scale instrumentation. As a result, the merged entity’s products
       would become the default choices for customers in early stages of the development
       of new production processes. Moreover, as customers generally experience
       difficulties to switch products in a production process, GE’s strength in lab-scale
       systems would be transferred to process-scale production processes.
(538) The complainant argues that such a strategy could be implemented by designing
       Danaher’s filtration products to work with GEs Äkta platform, whereby the Äkta
       instrument would similarly have the pre-loaded recipes for these products. This
       would require the following modifications: (i) modifying Danaher’s filtration
       products to match the input connections to the Äkta device; (ii) modifying GE’s
       pumps and plumbing on the Äkta device to work with filtration; and (iii) creating
       pre-loaded Unicorn methods to operate filtration experiments. The complainant
       estimates that it would take roughly 3 years for this mechanism to materialise as a
       technical offering and 7-10 years for the financial effects to be realised.
(539) The Commission understands that the proposed theory of harm would require, inter
       alia, (i) a meaningful difference for customers to use GE’s or the merged party’s
       resins compared to competitor resins on the Unicorn/Äkta platform (pre- or post-
       Transaction); that (ii) this pre-loading would similarly be required for filtration;
       (iii) the ability and incentive for the merged entity to develop a single system for
379 Doc ID474, Doc ID859, Doc ID949.
                                                101
 ---pagebreak---        chromatography and filtration; that (iv) the parties would no longer sell a stand-alone
       device; and that (v) competitors would not have countervailing strategies.
(540) In relation to this complaint, the Notifying Party has brought to the Commission’s
       attention the following arguments:
       (a)      It would be technically challenging to develop a process development system
                that combines chromatography and filtration.
       (b)      This would in any event not be useful or efficient as technical challenges to
                combine functionalities would result in too many compromises for usage in
                chromatography.
       (c)      The Parties would not have an incentive to only offer such a combined
                system. There would not be substantial customer demand for such a system,
                downtime on chromatography systems are small, and as prices of
                chromatography systems are a multiple of those of filtration system, it would
                be costly to use such system only for filtration. The Parties would therefore
                lose a substantial proportion of their current sales (if not most).
       (d)      The current practice in terms of pre-loading of settings does not confer any
                significant advantage.
       (e)      The Parties would not be able or incentivised to close a combined system.
                Customers require lab-scale process development to try different types of
                consumables to optimise the production process, and would not purchase a
                system that does not allow testing consumables from different suppliers.
       (f)      Customers could purchase stand-alone filtration systems from the Parties’
                competitors in order to test filtration consumables from other suppliers.
                Furthermore, there is a large installed base of open systems in use today,
                which customers could continue to use. These have service lifetimes often in
                the range of 10-15 years.
(541) Most customers who expressed an opinion on this point in the market investigation
       indicate that there are no meaningful obstacles in using competitor resins on GE’s
       Äkta chromatography skids with Unicorn software. They for instance indicate that
       “[n]on-GE and GE resins can be used equally well on GE systems using Unicorn
       software”, that “[t]he parameters can be easily loaded into the software for non-GE
       resins - this is not an issue”, and that, overall, “[t]his makes almost no difference.
       We routinely use the AKTA and rarely use it in association with GE resins, yet it
       works very well”.380 Most competitors who expressed an opinion on this point
       agree.381
(542) This feedback from market participants is sufficiently concrete to justify doubts
       about the complainant’s assertion that GE’s alleged strength in lab-scale instruments
       has successfully translated into a corresponding strength in consumables and
       subsequently in process-scale products. Nonetheless, the market investigation results
       do not, in themselves, exclude that the merged entity could engage post-Transaction
380 Questionnaire Q1, question I.10.
381 Questionnaire Q3, question I.9.
                                                   102
 ---pagebreak---        in limiting interoperability. Therefore, the Commission investigated whether the
       merged entity would have the ability and incentive to pursue the strategy set out by
       the complainant.
(543) The Commission finds that, while customers and competitors who expressed an
       opinion in the market investigation on this point indicate that parameters also have to
       be loaded for filtration, this seems to be simpler than for chromatography.382
       Furthermore, it appears that most of these parameters would not be specific to the
       particular filter in use, but rather to the requirements of the customer’s production
       process. As put by one customer, “some parameters for the use of bioprocess
       filtration consumables do have to be loaded into the software of a filtration skid. For
       example, a filter will often have a maximum differential pressure. If this maximum is
       exceeded, the filter will shut off. This maximum will be loaded into the software both
       as a safety feature and to protect the product. Otherwise, nothing further needs to be
       loaded”. Other customers point to the same view: “parameters tend to be process-
       specific for filtration operations (not consumable specific) and these can be readily
       used with any software packages”; and “[t]he system software is programmed for the
       specific customer’s process parameters and during the production process, these
       parameters (pressure, flow, temperature, weight, volume, conductivity, etc.) are
       controlled. No specific filters data are loaded in the software. So, if filters fit the
       installation and if these filters is suitable to the process parameters there is no
       difference from which producer filters are used”.383
(544) In light of this, the Commission considers that limiting interoperability could be
       more difficult for filtration consumables than for chromatography resins.
       Considering that GE does not appear to currently engage in limiting interoperability
       of systems for resins, in which it already has a strong position today, the
       Commission has doubts as to the extent to which the addition of Danaher’s position
       in filtration consumables (which is furthermore less pronounced than GE’s in resins)
       would alter the merged entity’s incentives to limit interoperability post-Transaction
       for filtration (or chromatography, for that matter).
(545) Nevertheless, the Commission notes that a majority of customers and competitors
       who expressed an opinion on this point consider that the merged entity would
       technically and commercial be able to create a closed hardware system in the next
       five years with chromatography and bioprocessing filtration capabilities that would
       be compatible only with own consumables.384 385 However, the commercial
       prospects of such a combined and closed system appear to be rather limited.
(546) First, the complainant acknowledges that larger customers typically employ different
       personnel responsible for chromatography and filtration, and that production steps
       are developed sequentially (first a bioreactor, then products for clarification,
       chromatography, etc.). The characteristics of the production process are therefore not
       consistent with the use of such a device by these customers.
(547) Second, while some customers indicate that they would be commercially interested
       and/or see added value in a system that combines chromatography and filtration in a
382 Questionnaire Q1, question I.11 and questionnaire Q3, question I.10.
383 Questionnaire Q1, question I.11.
384 Questionnaire Q1, I.15, question I.16.
385 Questionnaire Q3, I.14, question I.15.
                                                       103
 ---pagebreak---        single machine, most customers would not be interested, or only be interested for
       specific applications. One customer “[c]an’t imagine that this would be relevant or
       practical”. Other customers do not see the benefits for their current activities
       (without, however, completely excluding its utility for some applications): “[w]e do
       not have a specification at this time where this would be considered an advantage”,
       “[t]his kind of set-up is not relevant for our research purposes” and “[w]e would
       loose flexibility in the R&D processes” or “[w]e are not interested in combined
       chromatography and filtration systems in a single machine, at least not in a lab-
       scale level where optimisation processes take place and each of the mentioned
       systems need to be independent and versatile”. Another customer speculates about
       potential benefits: “[t]his may be interesting for continuous processing but in
       general we would prefer to use separate skids since this gives more flexibility with
       respect to the products and suppliers”.386
(548) The Commission therefore considers that to the extent that there would be
       commercial interest in such an integrated device, demand would not be sufficient for
       the merged entity to profitably limit its offering to such a device by discontinuing the
       offering of stand-alone devices at the same time. Furthermore, to the extent that the
       merged entity would only offer such a device, the Commission considers it likely
       that customers would use stand-alone devices of competitors.
(549) Customers and competitors who expressed an opinion on this point also confirm that
       chromatography skids are typically more expensive than bioprocessing filtration
       skids, with “much more higher [prices]” according to a customer.387 This is in line
       with the Notifying Party’s submission and therefore also confirms that it would be
       unlikely for customers to use such system only for filtration.
(550) As regards the feasibility of a combined chromatography and filtration skid,
       customers generally consider that such a device is technically feasible, although
       some express reservations that are in line with the Notifying Party’s submission:
       “[t]here would need to be so many different options to allow the use of both
       chromatography and filtration at different scales and with multiple variables that it
       would likely be too cumbersome to use”. Another customer state that this is
       “[t]echnically feasible but expensive and lengthily across all modalities […]”.
       Several competitors also consider it feasible and indicate that the development phase
       could take between one and five years. Again, some express reservations. One
       competitor for instance submitted that “[i]t could work for filtration and membrane
       absorber based chromatography but I don’t see it working for the conventional
       chrome. Also the price and maintenance on such a machine could be prohibitive.
       Millipore have tried this with SMART Flexready”.388
(551) On the basis of all the available evidence and in light of the above, the Commission
       considers that essential conditions for the theory of harm proposed by the
       complainant are unlikely to materialise.
386 Questionnaire Q1, question I.13.
387 Questionnaire Q1, question I.14 and questionnaire Q3, question I.13.
388 Questionnaire Q1, question I.13.1 and questionnaire Q3, question I.12.1.
                                                        104
 ---pagebreak--- 4.9.4. Conclusion on conglomerate effects
(552) On balance and in light of above considerations, the Commission concludes that the
        Transaction does not give rise to serious doubts as to its compatibility with the
        internal market or the functioning of the EEA Agreement due to conglomerate
        effects.
5.      MARKET DEFINITION AND COMPETITIVE ASSESSMENT CONCERNING THE                                     PARTIES’
        ACTIVITIES IN OTHER LIFE SCIENCES RESEARCH SEGMENTS
(553) This section includes the Commission’s market definition and competitive
        assessment concerning life science areas outside of bioprocessing where GE and a
        Danaher operating company are active. These life science areas include molecular
        characterisation; microscopy; high-content screening; and laboratory filtration. In
        light of the horizontally overlapping activities of the Parties in these areas, the
        Commission’s competitive assessment will focus on horizontal non-coordinated
        effects. Given that the products the Parties and their competitors offer are
        differentiated and the suppliers in the relevant markets have differentiated profiles,
        horizontal coordinated effects are only briefly assessed at the end of this section.
5.1.    Molecular characterisation
(554) Molecular characterisation focuses on the study of characteristics of and interactions
        between molecules (most often, proteins).389 Molecular characterisation is used in
        various industry sectors, including biotechnology (for the development of biological
        therapeutic drugs); pharmaceuticals (to measure the interaction between large and
        small molecules); and academia (for various biological research purposes).390
(555) Depending on whether the sample studied requires                                   tagging,      molecular
        characterisation techniques can be classified as follows:
        (a)       Label-based detection technologies, which use labels or tags (foreign
                  substances such as dyes) attached to the molecule of interest, to detect
                  molecular presence and measure the relevant molecular properties and
        (b)       Label-free (“LF”) detection techniques, which perform these measurements
                  without the aid of labels, based on measurement of the optical, calorimetric,
                  electrical, acoustic, or other physical reaction of the sample to various
                  stimuli.391 There are two broad categories of commercialised LF detection
                  systems, (i) surface plasmon resonance (“SPR”) systems392; and (ii) non-SPR
                  systems which are based on various different technologies. The most
                  widespread non-SPR LF technology is bio-layer interferometry (“BLI”).393
389 Form CO, paragraph 2232.
390 Form CO, paragraphs 2238-2245.
391 Form CO, paragraph 2246.
392 SPR systems typically use biosensors made from thin films of gold. Shining incident light on the gold film
    creates an energy field around the biosensor that enables detection of the molecules which bind to the
    biosensor.
393 BLI systems are based on an optical analytical technique. They detect biomolecules that are typically
    absorbed to the tips of optical fibers by analysing the interference pattern of white light reflected from two
    surfaces: a layer of immobilised protein to the biosensor tip and an internal reference layer.
                                                           105
 ---pagebreak--- (556) LF detection systems are composed of a main instrument and integrated software.
        They also use consumables (for example, biosensors, various reagents and buffers,
        and microtiter plates).
5.1.1. Market definition
5.1.1.1. Product market definition
        (A)       Notifying Party’s arguments
(557) The Notifying Party submits that there is an overall product market encompassing all
        molecular characterisation systems, irrespective of their technology. The Notifying
        Party justifies this by stating that customers use various technologies for common
        applications and that customer preferences are not driven by technology but the
        needs of a specific application.
(558) Having said this, the Notifying Party also provides detailed information regarding a
        plausible product market including only LF detection systems. However, the
        Notifying Party suggests that a product market definition including all LF detection
        systems would be inconsistent with the fact that there are highly differentiated LF
        technologies, such as SPR and BLI. For this reason, the Notifying Party takes the
        view that SPR-based LF detection systems and BLI-based LF detection systems
        constitute two separate (but neighbouring) markets.394
(559) Finally, the Notifying Party takes the view that it is not necessary to define separate
        product markets for the LF detection initial system and the LF detection system
        aftermarkets (including components, consumables, services, and software). Third-
        party reports do not break down this segment into initial systems and aftermarket
        elements and customers do not typically source aftermarket elements separately, but
        rather usually buy them from the manufacturer/supplier of the initial system.395
        (B)       Commission’s precedents
(560) The Commission has not previously defined the product scope of the relevant
        markets concerning molecular characterisation.
        (C)       Commission’s assessment
(561) The Commission assessed product market definition in relation to molecular
        characterisation, taking into account the functionality of different devices; their use
        applications; and the technologies they deploy.
(562) The vast majority of customers and the majority of competitors who expressed an
        opinion in this respect took the view that LF detection systems constitute a distinct
        relevant market within the field of molecular characterisation.396 Customers and
        competitors indicated that LF detection systems are typically used to measure the
        kinetics (that is the speed of interactions) between molecules.397 The majority of
        customers and competitors who expressed an opinion on this point also noted that
394 Form CO, paragraph 2436.
395 Form CO, paragraphs 2402-2407.
396 Questionnaire Q2, question B.C.2 and questionnaire Q4, question B.C.2.
397 Questionnaire Q2, questions B.B.1, B.C.2.2 and questionnaire Q4, question B.C.3.1.
                                                       106
 ---pagebreak---          customers are able to use label-based techniques only for some – but not most -- of
         the applications for which they use LF techniques.398 One customer explained: “[LF]
         detection is used to evaluate binding affinity and binding kinetics of antibodies and
         antibody drug conjugates. We do not recognize other label-based technologies that
         provide equivalent data”.399 As competitors put it, “[i]t is not possible to measure
         kinetics with ELISA [a label-based technique]”400 and “for kinetics you need label
         free”.401
(563) Within LF detection systems, neither customers nor competitors supported separate
         relevant product markets for SPR-based and BLI-based LF detection systems. For
         example, one customer noted that “BLI [detection systems of Danaher] can compete
         with [GE’s SPR system]” and another added: “[GE’s SPR detection system and
         Danaher’s BLI detection system] offer among the best throughput performance in
         the market”.402 One competitor stated “SPR and BLI [...] devices are both strongly
         use[d] in the market of antibodies and thus have a strong overlap”.403
(564) In the light of the above and considering all information in the file, the Commission
         concludes that there is no single overall product market including all molecular
         characterisation techniques. Instead, the relevant product market comprises only LF
         detection systems.404 This differentiated market comprises both SPR-based and BLI-
         based LF detection systems. The Commission will take into account the differences
         between these systems when to determining the closeness of the Parties’ offerings, in
         the framework of the competitive assessment.
(565) Finally, the relevant market also comprises after-market elements which are typically
         sourced by the instrument supplier. This is also consistent with the results from the
         market investigation, where the majority of customers and competitors who
         expressed an opinion on this point stated that “[t]he distinction between instruments
         and aftermarket does not seem a relevant consideration for the purposes of
         determining the relevant product market” in molecular characterisation and that
         “[a]ftermarket products and services are generally provided by suppliers only for
         their own instruments”.405 For this reason, the Commission does not distinguish
         separate markets for instruments and aftermarket elements in LF detection
         systems.406
5.1.1.2. Geographic market definition
         (A)       Notifying Party’s arguments
(566) The Parties consider that the relevant market for LF detection systems is worldwide
         and in any event, not narrower than EEA-wide.
398 Questionnaire Q2, question B.C.3 and questionnaire Q4, question B.C.3.
399 Questionnaire Q2, question B.C.3.1.
400 Questionnaire Q4, question B.C.3.1.
401 Questionnaire Q4, question B.E.2.1.
402 Questionnaire Q2, question B.E.4.1.
403 Questionnaire Q4, question B.C.2.1.
404 Label-based detection systems for molecular characterisation are not discussed further as the Transaction
    does not give rise to horizontally or non-horizontally affected markets in this respect.
405 Questionnaire Q2, question B.C.1.
406 See also Commission decision of 16 June 2011 in Case No COMP/M.6175 – Danaher/Beckman Coulter,
    recital 20.
                                                          107
 ---pagebreak---         (B)        Commission’s precedents
(567) The Commission has not previously defined the geographic scope of the markets
        concerning molecular characterisation or LF detection systems.
        (C)        Commission’s assessment
(568) There are indications of the existence of a worldwide relevant market, as the
        majority of customers who expressed an opinion in the market investigation on this
        point stated that they procured LF detection systems at worldwide level.407 Also,
        after-sale services are provided at worldwide level, prices are comparable and the
        same suppliers are active worldwide.408 These findings are consistent with the
        responses from the vast majority of competitors who expressed an opinion on this
        point.409 However, the views of competitors were split as to whether price levels of
        molecular characterisation products are homogeneous or not across different global
        regions (not narrower than the EEA).410
(569) For the purposes of this decision, the Commission concludes that it can be left open
        whether the market for LF detection systems is global or EEA-wide in scope. The
        Transaction gives rise to serious doubts as to its compatibility with the internal
        market or the functioning of the EEA Agreement under both these plausible
        geographic market definitions for the reasons explained in paragraphs (570) to (595)
        below.
5.1.2. Competitive Assessment
(570) In LF detection systems, Danaher is active through Fortébio, a division of its
        subsidiary Molecular Devices (“MolDev”) and offers an SPR-based product line
        (Pioneer)411 and BLI-based product lines, Octet412 and BLItz. SPR-based products
        represented […]% of Danaher’s 2018 turnover from LF detection instrument sales
        worldwide.413 GE offers its SPR-based product line, Biacore.414 GE does not offer
        BLI-based LF detection systems.
(571) In the market for LF detection systems, the combined entity would be the far-and-
        away market leader both worldwide and in the EEA. As shown in Table 19 below,
        the combined market share of the Parties in 2018 was [60-70]% worldwide
        and [50-60]% in the EEA. Danaher contributed a […] under both geographic market
        delineations, namely [20-30]% in the worldwide market for LF detection systems
        and [10-20]% in the EEA.
407 Questionnaire Q2, question B.D.1.
408 Questionnaire Q2, question B.D.1.
409 Questionnaire Q4, question B.D.1.
410 Questionnaire Q4, question B.D.2.
411 Including Pioneer and Pioneer FE systems.
412 Including Octet RED384, Octet QKe, Octet HTX, Octet K2, and Octet RED96e systems.
413 Form CO, table 180.
414 Including Biacore C, Biacore X100, Biacore T200, Biacore S200, Biacore 8K, and Biacore 8K+.
                                                      108
 ---pagebreak--- Table 19 – LF Detection Systems – 2018
                                                      Worldwide                  EEA
                                               Revenues      Market     Revenues     Market
                                                (USD M)     Share (%)   (USD M)    Share (%)
 Danaher                                      […]          [20-30]%     […]       [10-20]%
 GE                                           […]          [30-40]%     […]       [40-50]%
 Combined                                     […]          [60-70]%     […]       [50-60]%
 Nanotemper                                   […]          [10-20]%     […]       [10-20]%
 Malvern Microcal                             […]          [10-20]%     […]       [5-10]%
 Bruker Sierra Sensors                        […]          [0-5]%       […]       [0-5]%
 Reichert                                     […]          [0-5]%       […]       [0-5]%
 Carterra                                     […]          [0-5]%       […]       [0-5]%
 Corning “EPIC” / PerkinElmer “EnSpire”       […]          [0-5]%       […]       [0-5]%
 Dynamic Biosensors                           […]          [0-5]%       […]       [0-5]%
 Others                                       […]          [5-10]%      […]       [5-10]%
 Total                                        […]          100%         […]       100%
Source: Form CO
(572) As Table 19 shows, the Transaction will combine the top two players in the market
        for LF detection systems. As the Parties themselves acknowledge, “GE is one of the
        main vendors” in this area “due in large part to its first mover advantage and the
        large installed base for its systems”.415 In 2018, Danaher was the strongest
        competitor to GE in this market both at worldwide and at EEA level. Post-
        Transaction, the remaining competitors will include only two players with shares
        [10-20]% (Nanotemper and Malvern Microcal) and a long tail of small players with
        shares that do not exceed [0-5]%.
5.1.2.1. Notifying Party’s Arguments
(573) The Parties argue that these combined shares overstate the extent to which they
        constrain one another’s competitive behaviour in LF detection systems.
        (A)       The Parties’ technologies are very different and they do not compete for the
                  same use cases
(574) The Notifying Party claims that the Parties do not compete closely in LF detection
        systems. It takes the view that they are not close competitors because Danaher
        focuses on BLI-based LF detection systems while GE only offers SPR-based
        systems. According to the Notifying Party, SPR and BLI have different strengths and
        weaknesses. While BLI would deliver higher throughput and lower sensitivity, SPR
        would deliver higher sensitivity and lower throughput.
(575) The Notifying Party adds that because of the technical differences between SPR and
        BLI, the main applications for which GE and Danaher offer their products are
        distinct. The Parties distinguished between different types of customers that use LF
        detection systems, namely pharma companies; biotechnology companies; and
        academia. Within the biotechnology segment, the Parties also considered different
        use cases, including lead generation and optimisation (“LGO”); process development
        (“PD”); cell line development (“CLD”); and quality control (“QC”).
415 Form CO, paragraph 2492.
                                                  109
 ---pagebreak--- (576) According to the Notifying Party, Danaher’s BLI product line Octet has [market
        positioning]. On the other hand, GE’s SPR products appear to be [market
        positioning].
        (B)       The Parties will continue facing strong competition constraints post-
                  Transaction
(577) The Notifying Party acknowledges that there are some use cases for which both
        Parties’ instruments compete, [market positioning]. For these use cases, the
        Notifying Party argues that post-Transaction, the combined entity will continue to
        face significant competitive constraints from rivals.
(578) First, post-Transaction, the Notifying Party submits that Danaher and GE will face
        strong competition from other LF detection system suppliers (including other
        suppliers of SPR- and BLI-based instruments), as well as from label-based and other
        suppliers, such as Bruker/Sierra, Reichert, Carterra, Nicoya, Malvern Microcal,
        Nanotemper, and Corning.
(579) Second, according to the Notifying Party, barriers to entry in the market for LF
        detection systems are low, as in the past 10 years companies such as Sierra Sensors,
        Reichert, Creoptix, ProbeLife, and Biametrics have introduced new LF detection
        systems.
5.1.2.2. Commission’s Assessment
(580) The market investigation did not confirm the Parties’ arguments regarding the
        competitive interaction between Danaher and GE in LF detection systems.
        (A)       The Parties compete closely in most use cases
(581) The Commission found that the Parties’ products compete closely in LF detection
        systems because they are used for the same types of measurements. The Parties
        products also compete closely in terms of throughput and sensitivity/precision and
        they are often purchased for the same use cases. Finally, the Parties’ recent product
        launches and […] appear to be moving their respective product lines closer towards
        the other’s.
(582) First, the results of the market investigation suggested that, contrary to the Parties’
        claims, Danaher and GE are close competitors in (worldwide or EEA-wide) market
        for LF detection systems. During the market investigation, irrespective of the
        differences between SPR and BLI technologies, the vast majority of customers who
        expressed an opinion on this point identified Danaher as the closest competitor to
        GE in LF detection systems for most types of measurements, including binding
        affinity; binding specificity; and kinetics.416 The vast majority of competitors who
        expressed an opinion on this point identified Danaher as the closest competitor to
        GE in LF detection systems for binding affinity; binding specificity; kinetics; and
        concentration.417
(583) Second, the majority of customers and competitors who expressed an opinion in the
        market investigation on this point took the view that Danaher’s (SPR- and BLI-
416 Questionnaire Q2, question B.E.3.
417 Questionnaire Q4, question B.E.3.
                                                  110
 ---pagebreak---         based) and GE’s SPR-based instruments compete strongly or at least moderately as
        regards throughput.418 As one customer put it, “Danaher and GE seem to be directly
        competing against each other in terms of throughput”.419 Another customer added:
        “Biacore 8K+ (SPR) and Danaher Octet HTX (BLI) offer among the best throughput
        performance in the market”.420
(584) The majority of customers and competitors who expressed an opinion in the market
        investigation on this point also submitted that Danaher and GE compete strongly or
        at least moderately as regards sensitivity/precision.421 While respondents
        acknowledged the technical differences between SPR- and BLI-based LF detection
        systems, they still found that the one can compete with the other. According to one
        competitor, “GE is generally consider[ed] having higher precision, but in many
        applications, it is not necessary and thus competition is strong”.422
(585) Third, in the market investigation, several customers and competitors also indicated
        that both SPR- and BLI-based LF detection systems are purchased for most uses
        cases, including use cases for which the Parties claimed that SPR- or BLI-based LF
        detection systems have difficulties to compete, such as drug discovery (for pharma
        customers); CLD (for biotech customers); and PD (for biotech customers).423
(586) Fourth, it appears that the Parties’ recent product launches and […] may be moving
        their respective product lines closer towards the other’s. In 2016Q4, GE launched
        Biacore 8K series, an SPR-based LF detection system which however has
        established itself as a high-throughput product.424 High-throughput is a typical
        characteristic of BLI-based LF detection systems. […].425 On the other hand,
        in 2015, Danaher launched the Oktet K2 System, which is based on BLI technology
        but was meant [Danaher’s business strategy].426 In 2012, Danaher also purchased
        SensIQ which offers SPR LF detection instruments. […].427
(587) In light of the results of the market investigation as well as all evidence available to
        it, the Commission concludes that, contrary to the Parties’ claims, the products of
        Danaher and GE in LF detection systems compete closely in most use cases.
        (B)        Competitive constraints to the combined entity post-Transaction will be
                   limited
(588) The Commission found that post-Transaction, the combined entity will have
        significant market power in LF detection systems worldwide and in the EEA and
        that it will face only limited constraints.
418 Questionnaire Q2, question B.E.4 and questionnaire Q4, question B.E.4.
419 Questionnaire Q2, question B.E.4.
420 Questionnaire Q2, question B.E.4.
421 Questionnaire Q2, question B.E.5 and questionnaire Q4, question B.E.5.
422 Questionnaire Q2, question B.E.5.
423 Questionnaire Q2, question B.E.1 and questionnaire Q4, question B.E.1.
424 [GE’s internal documents].
425 [GE’s internal documents].
426 [Danaher’s internal documents].
427 [Danaher’s internal documents].
                                                       111
 ---pagebreak--- (589) First, while several customers acknowledged that credible alternatives might remain
       in the market for LF detection systems,428 the market investigation did not provide
       substantiated evidence that the rivals mentioned by the Notifying Party in this
       market could compete strongly with the combined entity in terms of price.429 One
       customer stated: “[w]e think the Biacore / ForteBio combination is likely to continue
       to be dominant in market share”430 and also “[w]e can expect [the combined entity]
       to rationalize its product range and perhaps leverage its market position to raise
       prices”.431
(590) In addition, the majority of informative customers who expressed an opinion on this
       point are concerned that post-Transaction, their company will not have credible
       alternatives for all or at least for some use cases.432 As one customer put it, “[GE’s]
       Biacore [and Danaher’s] Fortebioare the industry gold standard [...] [it] is not a
       matter of existing alternatives or cost [...] [it] is a matter of producing results that
       are trusted in the community [and] thus have value”.433
(591) In the same vein, the majority of competitors who expressed an opinion on this point
       noted that in the market for LF detection systems, post-Transaction the combined
       entity will not be constrained by strong rivals.434 As one competitor put it, “[...]
       label-free instruments SPR, BLI and similar are commonly purchased on instrument
       at a time [. ...] The leading SPR instrument (Biacore) has spent the last 25-30 years
       to build its installed base. [Danaher] has spen[t] many years as well to reach its #2
       position in the market. No other competitor is close. Each will need 5+ years to
       build a profitable installed base while competing against entrenched competitors GE
       and Danaher. It is likely many of these companies will exit the market due to
       cost/time involved to profitably compete [...]”.435 Another competitor summarised
       the situation as follows: “yes [there will be] alternatives but difficult to compete with
       the combined level of market [strength]” that the Parties will have post-
       Transaction.436
(592) Second, the market investigation results overall did not confirm the Parties’ claims
       that recent and new entrants can constrain the combined entity post-Transaction in
       LF detection systems (worldwide or in the EEA). While the majority of customers
       who expressed an opinion on this point expect additional companies to enter the
       market for LF detection systems in the next two to three years,437 several customers
       expressed concerns about the success of such entry in the long run. According to one
       customer, “[t]here has been continuous turn-over of start-ups in this field with new
       players entering and many leaving it again”.438 Another customer indicated:
       “entrance of further players is to be expected but it’s not clear when this will happen
       and whether they will be able to sustain”.439 The answers of competitors during the
428 Questionnaire Q2, question B.E.7.
429 Questionnaire Q2, question B.E.7.
430 Questionnaire Q2, question B.E.7.1.
431 Questionnaire Q2, question B.E.10.1.
432 Questionnaire Q2, question B.E.9.
433 Questionnaire Q2, question B.E.9.1.
434 Questionnaire Q4, questions B.E.8 and B.E.10.
435 Questionnaire Q4, question B.E.7.
436 Questionnaire Q4, question B.E.10.1.
437 Questionnaire Q2, question B.E.8.
438 Questionnaire Q2, question B.E.8.1.
439 Questionnaire Q2, question B.E.8.1.
                                                  112
 ---pagebreak---          market investigation were also inconclusive. While a small majority of competitors
         who expressed an opinion on this point expects that additional companies will enter
         the development and supply of LF detection systems in the next two to three years,
         one competitor stated “[LF] market is dominated by Fortebio and Biacore, besides
         these two there is nothing relevant”440 and regarding recent entrants, one competitor
         added: “[these] companies are less established players may not have the extent of
         portfolio or the reach to ensure a full replacement opportunity for the customer,
         particularly from a single vendor”.441
(593) Further confirming that post-Transaction the combined entity will have significant
         market power in LF detection systems and it will not face important competitive
         constraints, the majority of customers who expressed an opinion on this point442 and
         the vast majority of competitors who expressed an opinion on this point took the
         view that the Transaction could result in price increases in the market.443
(594) In light of the results of the market investigation as well as all evidence available to
         it, the Commission concludes that, contrary to the Parties’ claims, the competitive
         constraints to the combined entity post-Transaction will be limited and as a result,
         there is a risk of price increases in LF detection systems.
5.1.2.3. Conclusion
(595) In light of the above considerations as well as all evidence available to it, the
         Commission concludes that in the worldwide or EEA-wide market for LF detection
         systems, the proposed Transaction gives rise to serious doubts as to its compatibility
         with the internal market or the functioning of the EEA Agreement due to horizontal
         non-coordinated effects given in particular (i) the significant combined share of the
         Parties and the meaningful increment contributed by Danaher; (ii) the close
         competition between the Parties; (iii) the lack of strong competitors or entry
         prospects; and (iv) the concerns for price increase expressed in the market
         investigation.
5.2.     Microscopy
(596) Microscopes are instruments for making enlarged images of small objects and
         minute structures. There are several different microscopy techniques, including
         optical microscopy; electron microscopy; and scanning probe microscopy.444
(597) This section will focus on optical microscopy, where the activities of the Parties
         overlap horizontally. Optical microscopes are instruments that use the spectral range
         of light to image the object of interest through a system of magnifying lenses. The
         Parties have no product offerings using other microscopy techniques.
440 Questionnaire Q2, question B.E.8.1.
441 Questionnaire Q4, question B.E.8.1.
442 Namely, customer respondents excluding respondents who do not purchase LF detection systems at all or
    they do not purchase such systems as end-customers (that is they are distributors).
443 Questionnaire Q2, question B.E.10 and questionnaire Q4, question B.E.10.
444 Commission decision of 16 June 2011 in Case No COMP/M.6175 – Danaher/Beckman Coulter,
    recital 27.
                                                       113
 ---pagebreak--- (598) Optical microscopes can be further distinguished based on the illumination technique
        followed and on the field of application:
        (a)     A microscope’s illumination technique determines which part of the sample
                is illuminated and how. Widefield microscopy (where the whole sample is
                permanently illuminated) can be distinguished from confocal microscopy
                (where only one single focal spot is illuminated at a time).
        (b)     A microscope’s field of application is based on the instrument’s achievable
                resolution. Microscopes that can surpass the so-called “diffraction limit” and
                achieve resolution below 200-250 nm are called super-resolution
                microscopes. Ultra-high resolution microscopes are microscopes which,
                albeit highly developed, do not surpass the diffraction limit of light. Super-
                resolution microscopes and ultra-high resolution microscopes can be further
                sub-segmented based on the illumination technique followed and other
                criteria.
5.2.1. Market definition
5.2.1.1. Product market definition
        (A)       Notifying Party’s arguments
(599) The Parties consider that not all optical microscopes are part of a single product
        market. In the Parties’ view, a general market definition at that level would be too
        wide.
(600) The Parties also do not consider appropriate to define product markets only based on
        the illumination technique. A possible product market for widefield microscopes
        would include instruments of very different quality and level of development, from
        the most advanced to the most basic. It would include, for example, simple
        microscopes used in schools and highly advanced microscopes used in biomedical
        research. The same would be the case for a broad possible product market
        encompassing all confocal microscopes.
(601) In the Parties’ view, super-resolution microscopes constitute one single product
        market, separate from ultra-high resolution microscopes. Within this market, the
        Parties reject any further sub-segmentations, for example by resolution level or by
        illumination technique (that is to say confocal and widefield). The Parties argue that
        the key characteristic of super-resolution microscopes is their ability to surpass the
        diffraction limit. According to the Parties, the resolution level and the illumination
        techniques are not decisive for the customer.
(602) As regards ultra-high resolution microscopes, the Parties distinguished advanced
        inverted research microscopes as a separate product market. These are highly
        developed (widefield) microscopes that make it possible to resolve detail in high
        resolutions from 1000 nm up to 250 nm. They are called “inverted” because the slide
        with the specimen is above and the objective below (while in “upright” microscopes
        the slide is below and the objective above). Inverted microscopes are typically used
        to observe living cells, which are commonly grown in liquid solutions. In contrast,
        upright microscopes are commonly used with fixed samples.
                                                  114
 ---pagebreak---          (B)        Commission’s precedents
(603) The Commission has not previously defined the relevant product market for
         microscopy. In Danaher/Beckman Coulter, the Commission took the view that
         surface science techniques (that is microscopy techniques) could be segmented into
         different product groups by reference to the specific analytical technique, but
         ultimately, the exact product market definition was left open.445
         (C)        Commission’s assessment
(604) The Commission assessed the product market definition in relation to optical
         microscopy, taking into account the achievable resolution; the illumination technique
         used by the microscope; and also its structure.
(605) The majority of customers who expressed an opinion on this point took the view that
         optical microscopes with different levels of achievable resolution and thus different
         fields of do not compete with each other in terms of price; use applications; technical
         characteristics; or efficiency. Most customers indicated that an ultra-high resolution
         microscope and a super-resolution microscope are not substitutable, regardless of the
         illumination technique used.446 Several competitors confirmed this.447 As one
         competitor put it, “super-resolution microscopes [...] tend to be significantly more
         expensive, in general require more support infrastructure, [and] safety training
         requirements due to exposed laser illumination”.448
(606) The results of the market investigation are, however, inconclusive as to whether
         super-resolution microscopes should be further sub-segmented into two separate
         product markets based on the illumination technique: (i) confocal super-resolution
         microscopes; and (ii) widefield super-resolution microscopes. The majority of
         customers who expressed an opinion on this point stated that confocal super-
         resolution microscopes do not compete with widefield super-resolution microscopes
         in terms of use applications; technical characteristics; or efficiency.449 But the views
         of customers were evenly split as regards substitutability in terms of price.450 The
         opinions of competitors on the substitutability between confocal super-resolution
         microscopes and widefield super-resolution microscopes were equally split.451
         According to one competitor, in some cases “purchasers already know and describe
         in detail what type of super-resolution microscope they prefer (e.g., based on
         confocal technique [...] or on widefield technique)” but other customers “might
         include less details on the requirements of the microscope because they are after
         versatile tools and they are mainly seeking high uptime”.452
(607) In light of their product characteristics and taking into account the results of the
         market investigation, the Commission concluded that super-resolution microscopes
         do not belong in the same market as ultra-high resolution microscopes. The
445 Commission decision of 16 June 2011 in Case No COMP/M.6175 – Danaher/Beckman Coulter,
    recitals 21, 27 and 31.
446 Questionnaire Q2, question C.C.1.
447 Questionnaire Q4, question C.C.1.
448 Questionnaire Q4, question C.C.1.
449 Questionnaire Q2, question C.C.2.
450 Questionnaire Q2, question C.C.2.
451 Questionnaire Q4, question C.C.2.
452 Minutes of call with competitor, 13 August 2019, Doc ID1075, paragraph 17.
                                                       115
 ---pagebreak---         Commission also takes the view that for the purposes of this decision, it can be left
        open whether there is a relevant market including all super-resolution microscopes or
        there are separate markets for (i) confocal super-resolution microscopes; and
        (ii) widefield super-resolution microscopes. The Transaction does not give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement under any of these plausible product market definitions.
(608) As for ultra-high resolution microscopes, the customers who expressed an opinion in
        the market investigation on this point confirmed that advanced inverted research
        microscopes cannot be replaced by an advanced upright microscope in terms of
        technical characteristics and use applications. According to one customer, “[t]here
        are applications (eg looking at plates with liquid cultures) that can only be
        performed in an inverted microscope. I would say an upright can be substituted by
        an inverted microscope, but an inverted microscope can not always be substituted by
        an upright microscope. This depends on the ability to turn your sample upside down
        [...]”.453 The views of competitors on this question were more varied, but most
        competitors did confirm that inverted microscopes are not substitutable with upright
        microscopes in terms of technical characteristics.454
(609) In light of the results of the market investigation as well as all evidence available to
        it, for the purposes of this decision, the Commission considers that there is a distinct
        relevant product market within ultra-high resolution microscopes including only
        advanced inverted research microscopes.455
5.2.1.2. Geographic market definition
        (A)        The Notifying Party’s arguments
(610) The Notifying Party submits that the markets for super-resolution microscopes and
        for advanced inverted research microscopes are worldwide and in any event, not
        narrower than EEA-wide.
        (B)        Commission’s precedents
(611) The Commission has not previously defined the geographic scope of the market for
        advanced inverted research microscopes.
        (C)        Commission’s assessment
(612) The market investigation confirmed the Notifying Party’s claims regarding
        geographic market definition.
(613) The majority of customers who expressed an opinion on this point stated that they
        procure (super-resolution and advanced inverted) microscopes at worldwide level;
        after-sale services are provided at worldwide level; prices are comparable at
        worldwide level; and the same suppliers are active at worldwide level. Customers
        confirmed that this applies to super-resolution microscopes and advanced inverted
453 Questionnaire Q2, question C.C.3.
454 Questionnaire Q4, question C.C.3.
455 Upright ultra-high resolution microscopes are not discussed further as the Transaction does not give rise to
    horizontal or non-horizontal overlaps in this respect.
                                                           116
 ---pagebreak---         research microscopes.456 The vast majority of competitors who expressed an opinion
        on this point took this view as well.457 However, several competitors also indicated
        that their market position differs significantly across different regions (for example
        in the EEA or outside the EEA).
(614) Therefore, the results of the market investigation were inconclusive as to the precise
        geographic scope of the plausible markets for super-resolution microscopes and for
        advanced inverted research microscopes. For the purposes of this decision, the
        Commission took the view that it can be left open whether the markets for super-
        resolution microscopes and for advanced inverted research microscopes are global or
        EEA-wide in scope. The Transaction does not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement
        under any of these plausible geographic market definitions (namely, worldwide or
        EEA-wide markets).
5.2.2. Competitive assessment
(615) In super-resolution microscopy, Danaher is active through its subsidiary Leica
        Microsystems (“Leica”). In this space, Danaher offers a confocal super-resolution
        microscope, namely Leica TCS SP8 STED.458 GE Biopharma offers widefield super-
        resolution microscopes, namely, GE Deltavision OMX SR and OMX Flex, which
        are both based on the SIM technology.459
(616) As explained above, the Transaction does not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement in
        super-resolution microscopy, under any possible market delineation. If separate
        markets were defined for each of widefield super-resolution microscopes and
        confocal super-resolution microscopes, the Transaction would not give rise to a
        horizontal overlap between the activities of the Parties.
(617) If one single market including all super-resolution microscopes were defined, then
        the Transaction would give rise to an affected market. However, in that relevant
        market, no competition concerns arise for the following reasons.
Table 20 – Super-resolution microscopes – 2018
                                  Worldwide                                  EEA
                    Revenues (USD)       Market Share (%)     Revenues (USD)     Market Share (%)
 Danaher (Leica)   […]                   [20-30]%           […]                  [10-20]%
 GE                […]                   [5-10]%            […]                  [0-5]%
 Combined          […]                   [20-30]%           […]                  [20-30]%
 Zeiss             […]                   [40-50]%           […]                  [50-60]%
 Nikon             […]                   [10-20]%           […]                  [10-20]%
 Abberior          […]                   [5-10]%            […]                  [5-10]%
 Others            […]                   [5-10]%            […]                  [5-10]%
 Total             […]                   100%               […]                  100%
Source: Form CO
456 Questionnaire Q2, question C.D.1.
457 Questionnaire Q4, question C.D.1.
458 STED stands for stimulated emission depletion and is a technique in confocal super-resolution
    microscopy.
459 SIM stands for structured illumination microscopy and is a technique in widefield super-resolution
    microscopy.
                                                    117
 ---pagebreak--- (618) First, based on the Parties’ estimates in Table 20 above, the combined share of the
         Parties in super-resolution microscopes in 2018 would be limited to [20-30]%
         worldwide. Post-Transaction, the combined entity would continue facing
         competition by several large competitors, including Zeiss (the number one player in
         the market worldwide) and also Nikon, Abberior, and others (including Olympus,
         Yokogawa, Andor, and Bruker/Vutara).460
(619) In the EEA, the combined share of the Parties in super-resolution microscopes
         in 2018 would be [20-30]% (see Table 20 above).461 The increment contributed by
         GE Biopharma would remain […], namely [0-5]%. Post-Transaction, several large
         rivals will remain in the market including Zeiss (the number one player in the market
         also in the EEA), Nikon, Abberior, and others (including Olympus, Yokogawa,
         Andor, and Bruker/Vutara).
(620) Second, Danaher and GE Biopharma are not close competitors in super-resolution
         microscopes:
         (a)     The Parties use different illumination principles in their super-resolution
                 microscopes. Danaher’s super-resolution microscopes use confocal STED
                 technology, whereas GE Biopharma uses SIM technology.
         (b)     The lack of close competition between the Parties is also reflected in the
                 [Danaher’s bidding data].462
         (c)     [Parties’ internal documents].463
         (d)     The results of the market investigation also support the conclusion that
                 Danaher and GE Biopharma do not compete closely in the market for super-
                 resolution microscopes. Most customers indicated that Zeiss, Olympus, and
                 Nikon are the closest competitors to Danaher (in terms of price; use
                 applications; technical characteristics; and overall assessment).464 All the
                 competitors who expressed an opinion in the market investigation on this
                 point identified Zeiss as the closest competitor to Danaher in super-resolution
                 microscopes and the majority of competitors who expressed an opinion on
                 this point identified Nikon as the second closest competitor.465
(621) Third, the vast majority of customers and competitors who expressed an opinion in
         the market investigation on this point did not expect that the Transaction would have
         a negative impact on the supply of super-resolution microscopes, in terms of price,
         quality, product range, innovation, or security of supply.
(622) In light of the considerations in paragraphs (615) to (621) above as well as all
         evidence available to it, the Commission concludes that the Transaction does not
460 The Commission verified with one competitor the market share estimates provided by the Parties in the
    worldwide market for super-resolution microscopes and confirmed that the combined share estimate for
    the Parties properly reflects (and if anything, overstates) the Parties’ position in the market (Minutes of
    call with competitor, 13 August 2019, Doc ID1075, paragraph 15).
461 See also Horizontal Merger Guidelines, paragraph 18.
462 [Danaher’s bidding data].
463 [Danaher’s bidding data]. [GE internal documents].
464 Questionnaire Q2, question C.E.6.
465 Questionnaire Q4, question C.E.6.
                                                          118
 ---pagebreak---        give rise to serious doubts as to its compatibility with the internal market or the
       functioning of the EEA Agreement in the market for super-resolution microscopes in
       the EEA or worldwide.
(623) In advanced inverted research microscopes, Danaher offers Leica DMi8 and GE
       offers DeltaVision Ultra.
(624) According to the Parties, the Transaction does not give rise to an affected market in
       advanced inverted research microscopes, as the combined share of the Parties would
       remain [10-20]%, worldwide and in the EEA. During the market investigation, the
       vast majority of customers and competitors who expressed an opinion on this point
       did not expect that the Transaction would have a negative impact on the supply of
       advanced inverted research microscopes in terms of price, quality, product range,
       innovation, or security of supply.466
(625) In light of the considerations in paragraphs (623) and (624) above as well as all
       evidence available to it, the Commission concludes that the Transaction does not
       give rise to serious doubts as to its compatibility with the internal market or the
       functioning of the EEA Agreement due to horizontal non-coordinated effects in the
       (non-affected) market for advanced inverted research microscopes worldwide or in
       the EEA.
5.3.   High content screening
(626) High content screening (“HCS”) is a screening method used to identify substances
       that alter the phenotype of a cell in a desired manner. An HCS system combines
       microscopy, advanced imaging processing, and analysis software. As a result, an
       HCS system can provide a description and quantitative information on complex
       inter- and intra-cellular events (for example changes in cellular appearance or in
       protein expression).
(627) There are three types of HCS systems:
       (a)       Widefield HCS systems. These devices are based on widefield microscopy.467
                 Widefield HCS systems provide a two-dimensional (“2D”) image of the cell
                 observed and they are generally considered easier to use than confocal HCS
                 systems. Widefield HCS systems can be further distinguished into
                 (i) personal imaging/automated cell imaging systems; and (ii) other widefield
                 HCS systems. Personal imaging/automated cell imaging systems are based on
                 the same technology as the other widefield HCS systems, but they offer
                 lower assay sensitivity and resolution. As such, they are less expensive than
                 other widefield HCS systems and they are typically used for basic research.
       (b)       Confocal HCS systems. These devices are based on confocal microscopy.468
                 Confocal HCS systems are more sophisticated than widefield HCS systems.
                 They are used to create three-dimensional (“3D”) images with increased
                 contrast.
466 Questionnaire Q2, question C.E.8 and questionnaire Q4, question C.E.8.
467 Described in paragraph (599)(a) above.
468 Described in paragraph (599)(b) above.
                                                       119
 ---pagebreak---          (c)     Laser scanning cytometers. These devices provide a 2D image of the cells
                 observed. This technology allows for very fast cell analysis but the quality of
                 the 2D imaging provided is very low.
5.3.1. Market definition
5.3.1.1. Product market definition
         (A)       The Notifying Party’s arguments
(628) The Notifying Party considered a relevant market including both widefield and
         confocal HCS systems but not laser scanning cytometers. According to the Notifying
         Party, laser scanning cytometry is a technology distinct from widefield and confocal
         imaging. It can only enumerate cells and provides imaging of a very low quality. In
         any event, the Notifying Party submits that the precise market delineation can be left
         open for the purposes of this decision, as neither Danaher nor GE Biopharma are
         present in laser scanning cytometry.
(629) If the market for HCS systems were to be sub-segmented further, the Notifying Party
         suggests that confocal HCS systems constitute a relevant product market, separate
         from widefield HCS systems. The functionality and price of widefield and confocal
         HCS systems is very different. As a result, widefield and confocal HCS systems are
         often used in different applications and by different customers.
(630) A widefield HCS system can be upgraded to a confocal based system in two ways:
         (i) through a (cost-intensive) hardware overhaul; or (ii) through (less costly) software
         updates which allow for improved image quality. The Notifying Party suggests that
         the possibility for an upgrade does not change its view that confocal HCS systems
         constitute a separate market. Even benefiting from a hardware overhaul or a software
         update, a widefield HCS system would not be substitutable to a confocal HCS
         system.469
(631) Within widefield HCS systems, the Notifying Party note that a distinction can be
         made between (i) personal imaging/automated cell imaging systems; and (ii) all
         other widefield HCS devices. This is because of the lower resolution and price of
         personal imaging/automated cell imaging systems compared to other widefield HCS
         devices. Ultimately, in the Notifying Party’s view, the exact market definition for
         personal imaging/automated cell imaging systems and other widefield HCS devices
         can be left open, because the Transaction does not raise competition concerns under
         any plausible product market delineation.
         (B)       Commission’s precedents
(632) The Commission has not previously defined the relevant product market for HCS
         systems. In Danaher/Beckman Coulter, the Commission referred to life
         instrumentation, which encompasses a range of distinct technologies, including HCS
         technology.470 The Commission added that the technologies in question can be
469 Form CO, paragraphs 2869 and 2872.
470 Commission decision of 16 June 2011 in Case No COMP/M.6175 – Danaher/Beckman Coulter,
    recital 23.
                                                   120
 ---pagebreak---          further sub-segmented into different product groups. However, the exact market
         definition was left open.471
         (C)      Commission’s assessment
(633) The Commission assessed product market definition in HCS systems, taking into
         account their different techniques and use cases.
(634) The results of the market investigation suggested that separate product markets
         should be defined for widefield HCS systems and confocal HCS systems. The
         majority of customers who expressed an opinion on this point stated that even an
         upgraded widefield HCS system472 cannot replace a confocal HCS system.473 The
         majority of customers who expressed an opinion on this point also flagged that the
         two types of HCS systems are not substitutable specifically in terms of price.474 This
         was confirmed by competitors. As one competitor put it, “confocal-based HCS
         systems are significantly more expensive than widefield-based HCS systems, and
         generally offer superior resolution”.475 Customers and competitors indicated that a
         confocal HCS system could replace a widefield HCS system in terms of use
         applications, technical characteristics, and efficiency – but not in terms of price.476
(635) As regards specifically widefield HCS systems, most customers stated that overall,
         they would not replace any type of widefield HCS device with a personal
         imaging/automated cell imaging system. According to both customers and
         competitors, personal imaging/automated cell imaging systems often lack flexibility
         and efficiency (for example they are slower in handling samples and they offer lower
         technical performance).477
(636) In light of the results of the market investigation as well as all evidence available to
         it, the Commission concludes that confocal HCS systems and widefield HCS
         systems do not compete with each other, in particular in terms of price. In addition,
         the Commission finds that personal imaging/automated cell imaging systems do not
         compete with other widefield HCS systems because of differences in flexibility and
         efficiency. For the purposes of this case, the Commission will therefore assess a
         relevant product market for confocal HCS systems and another relevant product
         market for widefield HCS systems (excluding personal imaging/automated cell
         imaging systems).478
471 Commission decision of 16 June 2011 in Case No COMP/M.6175 – Danaher/Beckman Coulter,
    recital 31.
472 Upgraded through either a hardware overhaul or a software tool.
473 Questionnaire Q2, question D.C.3.
474 Questionnaire Q2, question D.C.2.
475 Questionnaire Q4, question D.C.2.
476 Questionnaire Q2 question D.C.2 and questionnaire Q4, question D.C.2.
477 Questionnaire Q2, question D.C.1.1 and questionnaire Q4, question D.C.1.1.
478 In the remainder of the decision, “widefield HCS systems” will be meant to exclude personal
    imaging/automated imaging systems.
                                                       121
 ---pagebreak--- 5.3.1.2. Geographic market definition
        (A)        The Notifying Party’s arguments
(637) The Notifying Party submits that the markets for confocal HCS systems and
        widefield HCS systems are worldwide and in any event, not narrower than EEA-
        wide.
        (B)        Commission’s precedents
(638) The Commission has not previously defined the geographic scope of the market for
        (confocal or widefield) HCS systems.
        (C)        Commission’s assessment
(639) The market investigation confirmed the Parties’ claims regarding geographic market
        definition.
(640) The majority of customers who expressed an opinion on this point stated that they
        procure HCS systems at worldwide level; after-sale services are provided at
        worldwide level; prices are comparable at worldwide level; and the same suppliers
        are active at worldwide level. Customers added that this applies to all types of HCS
        systems.479 Competitors also confirmed this.480 Most competitors added that their
        market position in HCS systems does not differ significantly across different
        regions.481
(641) For the purposes of this decision, it can be left open whether the markets for
        confocal HCS systems and for widefield HCS systems are global or EEA-wide in
        scope. The Transaction does not give rise to serious doubts as to its compatibility
        with the internal market or the functioning of the EEA Agreement under any of these
        plausible geographic market definitions (namely, global or EEA-wide).
5.3.2. Competitive assessment
(642) The Transaction gives rise to horizontally affected markets in confocal HCS systems
        and widefield HCS systems.482
5.3.2.1. Confocal HCS systems
(643) In confocal HCS systems, Danaher is active through its subsidiary MolDev and
        offers one device, ImageXpress Micro Confocal. GE Biopharma offers IN Cell
        Analyzer 6500.
479 Questionnaire Q2, question D.D.1.
480 Questionnaire Q4, question D.D.1.
481 Questionnaire Q4, question D.D.2.
482 A plausible (global or EEA-wide) market for personal imaging/automated cell imaging systems would not
    be affected by the Transaction.
                                                      122
 ---pagebreak--- (644) Regarding confocal HCS systems, the Transaction does not give rise to serious
        doubts as to its compatibility with the internal market or the functioning of the EEA
        Agreement for the following reasons.
Table 21 – Confocal HCS systems – 2018
                                   Worldwide                               EEA
                     Revenues (USD)     Market Share (%)    Revenues (USD)    Market Share (%)
 Danaher
                    […]                 [20-30]%          […]                [10-20]%
 (MolDev)
 GE                 […]                 [5-10]%           […]                 [5-10]%
 Combined           […]                 [30-40]%          […]                 [20-30]%
 PerkinElmer        […]                 [30-40]%          […]                 [40-50]%
 Yokogawa           […]                 [10-20]%          […]                 [10-20]%
 Thermo Fisher      […]                 [10-20]%          […]                 [10-20]%
 Others             […]                 [5-10]%           […]                 [5-10]%
 Total              […]                 100%              […]                 100%
Source: Form CO
(645) First, the Parties held a combined share of [30-40]% in confocal HCS systems
        in 2018 worldwide, with GE Biopharma contributing a share increment of [5-10]%
        (see Table 21 above). Post-Transaction, the combined entity would continue facing
        competition by several large rivals including PerkinElmer (the number one player in
        the market), Yokogawa, and Thermo Fisher.
(646) In the EEA, the Parties held a combined share of [20-30]% in confocal HCS systems
        in 2018, with GE Biopharma contributing a share increment of [5-10]% (see Table
        21 above). Post-Transaction, the combined entity would continue facing competition
        by the same rivals that exert competitive constraints also at the worldwide level.
(647) Second, Danaher and GE are not close competitors in confocal HCS systems:
        (a)      Each of the Parties offer confocal HCS systems at a different price point.
                 Danaher’s Image Xpress Micro Confocal is available at a broad price range
                 of USD […] (depending on the specifications) while GE’s InCell 6500 is
                 priced at USD […]. As a result, Danaher competes with rival products across
                 the spectrum of prices in confocal HCS systems (including Perkin Elmer’s
                 Operetta CLS priced at USD […]), while GE is only present at the higher end
                 of the segment.
        (b)      [Danaher’s internal documents],483 […].484
        (c)      The majority of the customers who expressed an opinion in the market
                 investigation on this point confirmed that PerkinElmer is competing head-to-
                 head with Danaher in confocal HCS systems.485
(648) Third, post-Transaction, in addition to competing with established players like
        PerkinElmer and Thermo Fisher, the combined entity will continue to face
        competition from newer confocal HCS competitors, such as Zeiss, which entered the
        market of confocal HCS systems in April 2019, integrating its confocal laser
        scanning technology to its Celldiscover 7 platform.
483 [Danaher’s internal documents].
484 [Danaher’s internal documents].
485 Questionnaire Q2, question D.E.4.
                                                   123
 ---pagebreak--- (649) Fourth, the majority of customers who expressed an opinion on this point expects
         that the proposed Transaction will not have a negative impact on the price, quality,
         product range, innovation, and security of supply of confocal HCS systems.486
(650) In light of the considerations in paragraphs (643) to (649) above as well as all
         evidence available to it, the Commission concludes that, in the plausible worldwide
         and EEA-wide market for confocal HCS systems, the Transaction will not give rise
         to serious doubts as to its compatibility with the internal market or the functioning of
         the EEA Agreement due to horizontal non-coordinated effects.
5.3.2.2. Widefield HCS systems
(651) In widefield HCS systems, Danaher is active through MolDev and offers two
         devices, Image Xpress Micro 4 High-Content Imaging System and Image Xpress
         Nano Automated Imaging System. GE Biopharma offers IN Cell Analyzer 2500 HS
         HCA Imaging System.
(652) In widefield HCS systems, the Transaction does not give rise to serious doubts as to
         its compatibility with the internal market or the functioning of the EEA Agreement
         for the following reasons.
Table 22 – Widefield HCS systems – 2018
                                      Worldwide                                     EEA
                       Revenues (USD)       Market Share (%)        Revenues (USD)      Market Share (%)
 Danaher             […]                    [10-20]%               […]                  [0-5]%
 GE                  […]                    [10-20]%               […]                  [5-10]%
 Combined            […]                    [20-30]%               […]                  [5-10]%
 Thermo Fisher       […]                    [10-20]%               […]                  [20-30]%
 PerkinElmer         […]                    [10-20]%               […]                  [10-20]%
 Others              […]                    [40-50]%               […]                  [50-60]%
 Total               […]                    100%                   […]                  100%
Source: Form CO
(653) First, the Parties held a combined share of [20-30]% in widefield HCS systems
         in 2018 worldwide (see Table 22 above).487 The Transaction would not lead to an
         affected market at EEA level. Post-Transaction, the combined entity would continue
         facing competition by several large competitors, including PerkinElmer, Thermo
         Fisher and others (such as Nexelcom, Vala, Synentec, and Nikon). According to the
         majority of the customers and competitors who expressed an opinion in the market
         investigation on this point, PerkinElmer is competing head-to-head with Danaher in
         widefield HCS systems.488
(654) Second, the combined entity will also face strong competition from recent entrants,
         such as Zeiss, who is an established microscopy player expanding its activities in
         HCS systems. Zeiss launched its Celldiscoverer 7 platform in mid-2016. This
         product is marketed as combining the ease of use of an automated boxed microscope
         with auto adjustable optics and non-supervised multi-location imaging and the image
486 Questionnaire Q2, question D.E.6.
487 In the EEA, the Parties held a combined share of [5-10]% in widefield HCS systems in 2018. Therefore,
    the Transaction does not give rise to an affected market and the competitive assessment in the remainder
    of this section will focus on the worldwide market for widefield HCS systems.
488 Questionnaire Q2, questions D.E.3 and questionnaire Q4, question D.E.3.
                                                         124
 ---pagebreak---         quality and flexibility of a classic inverted research microscope.489 The majority of
        the customers who expressed an opinion in the market investigation on this point
        confirmed that they consider widefield HCS systems as a dynamic space with new
        players entering and existing players launching new products.490
(655) Third, the majority of customers who expressed an opinion on this point expects that
        the proposed Transaction will not have a negative impact on the price, quality,
        product range, innovation, and security of supply of widefield HCS devices.491
(656) In light of the considerations in paragraphs (651) to (655) above as well as all
        evidence available to it, the Commission concludes that, in the plausible worldwide
        and EEA-wide market for widefield HCS systems, the Transaction will not give rise
        to serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement due to horizontal non-coordinated effects.
5.4.    Laboratory filtration
(657) Laboratory filtration (“lab filtration”) products are the instruments and accessories
        used for laboratory-scale physical and chemical processing to separate solid particles
        form fluids using a filtration medium.
(658) Lab filtration products have applications in the biopharmaceutical, food and
        beverage, semiconductor and electronics manufacturing, and environmental
        industries. The main difference between lab filtration and bioprocessing filtration492
        is that lab filtration products are for small-scale use in laboratories while
        bioprocessing filtration products are used in large-scale manufacturing. Also, lab
        filtration products do not need the regulatory approval that is required for
        bioprocessing filtration.
(659) Lab filtration products can be distinguished in three broad categories:
        (a)      Filter Media. This category includes different consumables that can be used
                 as filters. There are two types of filter media: (i) fibrous filters (including
                 cellulose filter papers and glass microfibre filters); and (ii) membrane filters.
        (b)      Disposable Devices/Media encapsulation. Filters are often integrated in a
                 ready-to-use plastic device. Examples of such devices include syringe filters
                 (where the filter is attached at the end of the syringe), plate filters, etc.
        (c)      Lab filtration accessories. This category includes hardware that is used for
                 various lab filtration techniques (for example, filter holders, filter funnels,
                 microbiology manifolds).
489 Minutes of call with competitor, 13 August 2019, Doc ID1075, paragraph 21.
490 Questionnaire Q2, question D.E.5.
491 Questionnaire Q2, question D.E.6.
492 See section 4.5 above.
                                                       125
 ---pagebreak--- 5.4.1. Market definition
5.4.1.1. Product market definition
         (A)         The Notifying Party’s arguments
(660) According to the Notifying Party, the widest possible product market definition
         could be an overall single product market for laboratory filtration.
(661) Alternatively, the Notifying Party considered narrower product market definitions.
(662) In filter media, the Notifying Party distinguished between fibrous filters (which are
         inexpensive and have a high flow rate) and membrane filters (which are costlier and
         have a lower flow rate). Within fibrous media, the Parties distinguished between
         cellulose filter papers, which are used in basic research and glass microfiber filters,
         which have a higher chemical, temperature, and mechanical stability and are
         therefore used in more sophisticated applications.
(663) In disposable devices/media encapsulation, the Notifying Party submitted that there
         is significant supply-side substitutability between different devices. However, the
         Parties also suggested that demand-side substitutability is limited, because different
         disposable devices must be used for different applications (depending on the amount
         of sample to be filtered and the objective of the filtration). For example, syringe
         filters are used to filter small sample volume sizes in the following applications:
         sterile filtration, sample preparation, sterile venting, etc.
(664) Finally, the Notifying Party takes the view that there is an overall single market
         including all lab filtration accessories493. While there are differences between various
         types of accessories, they all share similarities in terms of basic function and there is
         strong supply side substitutability.
(665) In any event, the Notifying Party has submitted that the precise product market
         definition can be left open as the Transaction would not raise competition concerns
         under any plausible product market delineation.
         (B)         Commission’s precedents
(666) In its decisional practice, the Commission has not examined in detail the relevant
         product market definition for the lab filtration segment. In Thermo Electron/Fisher
         Scientific494, the Commission considered that all plastic microplates filters (a type of
         media encapsulation device) belonged to the same relevant product market without
         further distinction based on sizes or number of individual wells. Also, in Thermo
         Fisher/Phadia495, the Commission discussed separate markets for microplates for
         general use and microplates for diagnostic applications, but ultimately, the exact
         product market definition was left open.
493 Lab filtration accessories include various different type of products like: filter holders, filter funnels, filter
    flasks, hardware (that is membrane dispensers, peristaltic pumps, vacuum pumps, microbiology
    manifolds, microbiology manifold accessories, multi-well plate manifolds, shakers and pressures vessels)
    and other filtration accessories (that is tubes and seals).
494 Commission decision of 9 November 2006 in Case No COMP/M.4242 – Thermo Electron/Fisher
    Scientific, recital 23.
495 Commission decision of 18 August 2011 in Case No COMP/M.6293 – Thermo Fisher/Phadia, recital 67.
                                                            126
 ---pagebreak---         (C)        Commission’s assessment
(667) The market investigation is inconclusive as to whether there is an overall lab
        filtration product market or whether narrower markets should be defined.
(668) The majority of customers who expressed an opinion on this point consider there
        would be demand side substitutability in terms of price, types of applications,
        quality, and efficiency for all lab filtration products.496
(669) However, the explanations provided by several customers and competitors suggested
        that narrower relevant product markets could be defined on the basis of the materials
        used or the application of each product. For example, one customer indicated that
        “the different applications need to be considered” while other customers added that
        “specific process parameters require specific filtration parameters, incl. filter
        material, technical parameters (pore size, adhesion, binding, etc.)” and “the physical
        characteristics of the filter and filtration performance drivers like device type and
        accessory are critical for product selection in lab applications”.497 Competitors also
        indicated that there should be different product markets for the various sub-segments
        of lab filtration.498
(670) Considering the different product characteristics and applications of laboratory
        filtration products, it can be left open for the purposes of this decision whether there
        is a relevant market including (i) all lab filtration products or there are separate
        markets for (ii) lab filter media; (iii) all fibrous filter media; (iv) membrane filters;
        (v) non-microbiology membrane filters segment; (vi) microbiology membrane filters
        segment; (vii) cellulose filter papers; (viii) glass microfiber filter media; (ix) quartz
        filter papers (x) overall disposable devices/media encapsulation filters; (xi) syringe
        filters; (xii) non-sterile syringe filters; (xiii) sterile syringe filters; (xiv) 50/60 mm in-
        line filters; (xv) capsule filters segment; (xvi) vent filters segment; (xvii) plate filters
        segment; (xviii) spin devices; (xix) overall lab filtration accessories; (xx) filter
        holder segment; (xxi) filter funnels segment; (xxii) hardware segment;
        (xxiii) microbiology manifold segment; (xxiv) vacuum pumps segment; and (xxv)
        cut membrane discs. The Transaction does not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement
        under any of these plausible product market definitions.
5.4.1.2. Geographic market definition
        (A)        The Notifying Party’s arguments
(671) The Notifying Party submits that the markets in the lab filtration area are worldwide
        and in any event, not narrower than EEA-wide.
        (B)        Commission’s precedents
(672) The Commission has not examined in detail relevant geographic market for the lab
        filtration segment in its decisional practice.
496 Questionnaire Q2, question E.C.1 and questionnaires Q4, question E.C.1.
497 Questionnaire Q2, question E.C.1.1.
498 Questionnaire Q4, questions E.C.1.1 and E.C.2.
                                                       127
 ---pagebreak---           (C)         Commission’s assessment
(673) The majority of customers and competitors who expressed an opinion on this point
          views the lab filtration market or markets as global, but there are some market
          participants that put forward that there are different prices and lead times across
          regions499.
(674) The investigation in this case has confirmed that these markets are at least EEA-
          wide, but the exact scope of the geographic market can be left open, as the
          Transaction does not raise competition concerns under any of these market
          delineations.
5.4.2. Competitive assessment
(675) Danaher (through Pall Laboratory and Phenomenex) supplies various products in all
          categories of lab filtration products.
(676) GE Biopharma (through Whatman Lab Filtration) supplies a wide range of products
          in all categories of lab filtration products.
(677) The Transaction results in affected markets only in the following categories which
          constitute possible product markets: (i) all fibrous filter media; (ii) glass microfiber
          filter media; and (iii) microbiology manifolds.500
5.4.2.1. Fibrous filter media overall and glass microfiber filter media segment
(678) In the possible market for all fibrous filter media, the combined entity would have,
          according to the Notifying Party’s estimates for 2018, a market share of [30-40]%
          worldwide (with an increment of [0-5]% from Danaher) and [20-30]% market share
          in the EEA (with a [0-5]% increment from Danaher). The Transaction does not give
          rise to serious doubts as to its compatibility with the internal market or the
          functioning of the EEA Agreement at worldwide and EEA levels, in particular
          because the […] increment attributable to Danaher ([0-5]%) is confined to the mere
          re-sale of Ahlstrom-Munksjö’s products.
(679) When considering the different segments of fibrous filter media as separate product
          markets, the Parties’ activities would only overlap in the possible market for glass
          microfiber filter media. In the possible market for glass microfiber filter media, the
          Transaction does not give rise to serious doubts as to its compatibility with the
          internal market or the functioning of the EEA Agreement for the following reasons.
(680) First, if a glass microfiber filter media market were defined, the combined entity
          would have, according to the Notifying Party’s estimates for 2018, a market share of
          [20-30]% worldwide (with an increment of [0-5]% from Danaher) and [20-30]%
499 Questionnaire Q2, question E.D.1.1 and questionnaire Q4, question E.D.1.
500 According to the data provided by the Parties, the Transaction does not give rise to affected markets in
    (i) all lab filtration products or if there are separate markets for (ii) lab filter media; (iii) membrane filters;
    (iv) non-microbiology membrane filters segment; (v) microbiology membrane filters segment;
    (vi) cellulose filter papers; (vii) overall disposable devices/media encapsulation filters; (viii) syringe
    filters; (ix) non-sterile syringe filters; (x) sterile syringe filters; (xi) 50/60 mm in-line filters; (xii) capsule
    filters segment; (xiii) vent filters segment; (xiv) plate filters segment; (xv) spin devices; (xvi) overall lab
    filtration accessories; (xvii) filter holder segment; (xviii) filter funnels segment; (xix) hardware segment;
    (xx) vacuum pumps segment; (xxi) cut membrane discs; and (xxii) quartz filter papers.
                                                               128
 ---pagebreak---         market share in the EEA (with a [0-5]% increment from Danaher). The […]
        increment from Danaher’s side is likely to have no impact on the competitive
        environment; also, Danaher’s small market share comes from reselling the products
        bought from Ahlstrom-Munksjö.
(681) Second, according to the Parties501, the merged entity will continue to face effective
        competition from a number of suppliers like Ahlstrom-Munktell, Advantec,
        Macherey-Nagel and Hahnemuehle Fineart GmbH.
(682) Third, the vast majority of customers who expressed an opinion on this point
        expects502 that the proposed Transaction will not have a negative impact on the price,
        quality, product range, innovation, and security of supply of glass microfiber filter
        media. The views of competitors regarding the negative impact on price were evenly
        split, but the majority of competitors who expressed an opinion on this point do not
        expect any negative impact on quality, product range, innovation, and security of
        supply.
(683) In light of the considerations in paragraphs (678) to (682) above as well as all
        evidence available to it, the Commission concludes that, in the potential worldwide
        or EEA-wide markets for all fibrous filter media and glass microfiber filter media,
        the Transaction will not give rise to serious doubts as to its compatibility with the
        internal market or the functioning of the EEA Agreement due to horizontal non-
        coordinated effects.
5.4.2.2. Microbiology manifold segment
(684) In the microbiology manifold segment, the Transaction does not give rise to serious
        doubts as to its compatibility with the internal market or the functioning of the EEA
        Agreement for the following reasons.
(685) First, if a relevant product market would be defined for the microbiology manifold
        filter, the combined entity would have, according to the Notifying Party’s estimates
        for 2018, a market share of [10-20]% worldwide (which would not be an affected
        market) and a [20-30]% market share in the EEA (with a [0-5]% increment from GE
        Biopharma). Post transaction, the merged entity market share would be [20-30]%503
        with a […] increment from GE’s side.
(686) Second, the vast majority of customer who expressed an opinion on this point
        expects that the proposed Transaction will have no impact on the price, quality,
        product range, innovation, and security of supply of microbiology manifold
        segment504. Also, most competitors do not expect505 any negative impact on quality,
        product range, innovation, and security of supply.
501 Form CO, paragraph 2180.
502 Questionnaire Q2, question E.E.4.
503 See also Horizontal Merger Guidelines, paragraph 18.
504 Questionnaire Q2, question E.E.5.
505 Questionnaire Q4, question E.E.6.
                                                       129
 ---pagebreak--- (687) Third, the majority of competitors who expressed an opinion on this point
        answered506 that it would be easy to start producing in the microbiology manifold
        segment.
(688) Even though the majority of competitors who expressed an opinion on this point
        expressed concerns about a potential price increase post-transaction, in light of the
        Notifying Party's arguments507 that are in line with the above findings and
        considerations, the Commission concludes that the Transaction does not give rise to
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement in the possible worldwide or EEA-wide market for the
        microbiology manifolds.
5.4.2.3. Assessment of the non-affected markets of overall lab filtration products, syringe
          filters, cut membrane discs and lab filter media overall
(689) As some competitors raised competition concerns regarding the (non-affected)
        market for overall lab filtration products, the Commission also assessed a possible
        overall market for lab filtration products.
(690) However, in this market, based on the results of the market investigation, the
        Commission considers that the Transaction does not give rise to serious doubts as to
        its compatibility with the internal market or the functioning of the EEA Agreement
        for the following reasons. The combined entity would have, according to the Parties
        estimates for 2018508, a combined market share below 20% both at a worldwide level
        and at EEA level; the merged entity would still face competitive pressure from a
        number of suppliers like Merck Millipore, Sartorius, Advantec, Ahlstrom Munktell,
        Thermo Fisher and Macherey Nagel.
(691) The market investigation shows509 that customers consider that there would be
        enough suppliers on the market of overall lab filtration post-Transaction, including
        new entrants from China. In addition, the vast majority of customers who expressed
        an opinion on this point does not expect any negative impact of the proposed
        transaction on price, quality, product range, innovation, and security of supply510.
        Also, the majority of competitors who expressed an opinion on this point does not
        expect any negative impact of the proposed transaction on quality, product range,
        innovation, and security of supply.
(692) Also, the market investigation shows that customers consider that there are no
        barriers to switch suppliers as lab filtration products are not subject to regulatory
        filing as the bioprocessing filters are511.
(693) One competitor raised competition concerns regarding the (non-affected) markets for
        syringe filters and cut membrane discs512 and another competitor raised concerns
        regarding the (non-affected) lab filter media. However, in these markets, based on
506 Questionnaire Q4, question E.E.3.
507 Form CO, paragraphs 2190-2194.
508 Form CO, paragraph 2168
509 Questionnaire Q2, question E.E.3.
510 Questionnaire Q2, question E.E.3.
511 Questionnaire Q2, question E.E.3.1.
512 RFI 15 of 19 November 2019, question 2: “Cut membrane discs are circular discs cut from larger rolls of
    membrane; cut membrane discs would be a sub-segment of the membrane filters segment”.
                                                    130
 ---pagebreak---         the results of the market investigation, the Commission considers that the
        Transaction does not give rise to serious doubts as to its compatibility with the
        internal market or the functioning of the EEA Agreement for the following reasons.
        (a)       Syringe filters: The combined entity would have, according to the Parties
                  estimates for 2018, a combined market share below 20%513 both at a
                  worldwide level and at a EEA level; the merged entity would still face
                  effective competition competition from a number of suppliers like Merck
                  Millipore, Sartorius, Thermo Fisher and many small players, including new
                  low-cost entrants from China, more particularly in the analytical segment as
                  stated by the Parties514.
        (b)       Cut membrane discs: The combined entity would have a combined market
                  share below 20%515 both at a worldwide level and at a EEA level; the merged
                  entity would still face effective competition516 from a number of suppliers
                  like Merck Millipore, Sartorius, Thermo Fisher, Cobetter and many small
                  players like Advantec, MIDI, Sterlitech, Donaldson and others.
        (c)       Lab filter media: The combined entity would have a combined market share
                  below 20%517 both at a worldwide level and at an EEA level; the merged
                  entity would still face effective competition competition from a number of
                  suppliers like Merck Millipore, Sartorius, Thermo Fisher, and Corning.
(694) In light of the considerations in paragraphs (684) to (693) above as well as all
        evidence available to it, the Commission considers that, in the potential worldwide
        or EEA-wide markets for overall lab filtration, syringe filters, cut membrane discs
        and lab filter media, the Transaction will not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement due
        to horizontal non-coordinated effects under any plausible market definition.
5.5.    Coordinated effects
(695) The Notifying Party takes the view that the Transaction does not give rise to
        coordinated effects in the (worldwide or EEA-wide) markets for LF detection
        systems; super-resolution microscopes; confocal HCS systems; widefield HCS
        systems; fibrous filters; glass microfiber filter media; or microbiology manifolds.518
(696) The Commission assessed whether the Transaction gives rise to serious doubts as to
        its compatibility with the internal market or the functioning of the EEA Agreement
        in terms of coordinated effects in the markets mentioned in paragraph (695) above,
        taking into account the following:
        (a)       LF detection systems: In this market, Danaher focuses on LF detection
                  systems based on BLI technology while GE only offers systems based on
                  SPR technology. While the Commission considered the Parties to compete
                  closely, the market for LF detection systems has to be regarded as a
513 Form CO, paragraph 2049.
514 Pre-notification RFI 5, question 95.
515 RFI 15 of 19 November 2019, question 2.
516 RFI 15 of 19 November 2019, question 1.
517 Form CO, paragraph 2048.
518 Form CO, paragraphs 2197ff, 2527ff, 2948ff, and 3335ff.
                                                      131
 ---pagebreak---                 differentiated market. Not only the product offerings, but also the suppliers of
                LF detection systems are also differentiated including large suppliers (such as
                the Parties, PerkinElmer, and Bruker); medium-sized suppliers (such as
                Malvern Microcal); and smaller suppliers (such as Carterra and Creoptix).
                The market investigation did not reveal concerns of customers or competitors
                regarding coordinated effects in LF detection systems.519
        (b)     Super-resolution microscopes: The products of the Parties are highly
                differentiated, as Danaher offers confocal-based super-resolution
                microscopes and GE supplies widefield-based super-resolution microscopes.
                The market investigation did not reveal concerns of customers or competitors
                regarding coordinated effects in super-resolution microscopes.520
        (c)     Confocal HCS systems and widefield HCS systems: In HCS systems, post-
                Transaction, several players will remain in the market, including established
                competitors, such as PerkinElmer, and recent entrants, such as Zeiss.
                Furthermore, in confocal HCS systems, the Parties’ products are offered at
                highly differentiated price points. The market investigation did not reveal
                concerns of customers or competitors regarding coordinated effects in
                confocal HCS systems and widefield HCS systems.521
        (d)     Fibrous filter media, glass microfiber filter media, and microbiology
                manifolds. The relevant markets are highly asymmetric as reflected in the
                significant market share differences between Danaher and GE.522 The market
                investigation did not reveal concerns of customers or competitors regarding
                coordinated effects in these plausible markets.523
(697) In light of the considerations above as well as all evidence available to it, the
        Commission concludes that, in the worldwide or EEA markets for mentioned in
        paragraph (695) above, the Transaction will not give rise to serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement due
        to horizontal coordinated effects.
6.      CONCLUSION ON COMPETITIVE ASSESSMENT
(698) In view of sections 4 and 5 above, the Commission concludes that the following
        markets will give rise to serious doubts as to their compatibility due to horizontal
        non-coordinated effects: (i) in the worldwide market for microcarriers (either overall,
        or in the potential markets for microporous microcarriers, animal-based
        microcarriers, non-animal-based microcarriers, cationic microcarriers or collagen-
        coated microcarriers); (ii) the worldwide or EEA-wide market for TFF systems
        (SUT); (iii) the worldwide or EEA-wide market for flat sheet TFF systems (SUT);
        (iv) the worldwide market for hollow fibre TFF systems (conventional); (v)
        the worldwide or EEA-wide market for stainless steel chromatography skids; (vi) the
        worldwide or EEA-wide market for SUT chromatography skids; (vii) the worldwide
519 Questionnaire Q2, questions F.1, F.3, and G.2 and questionnaire Q4, question F.2.
520 Questionnaire Q2, questions F.1, F.3, and G.2 and questionnaire Q4, question F.2.
521 Questionnaire Q2, questions F.1, F.3, and G.2 and questionnaire Q4, question F.2.
522 See paragraphs (679), (681), and (686) above.
523 Questionnaire Q2, questions F.1, F.3 and G.2 and questionnaire Q4, question F.2.
                                                        132
 ---pagebreak---        or EEA-wide market for continuous chromatography skids; (viii) the worldwide or
       EEA-wide market for non-Protein A affinity resins; (ix) the worldwide or EEA-wide
       market for ion exchange resins; (x) the worldwide or EEA-wide market for mixed-
       mode resins; (xi) the worldwide or EEA-wide market for chromatography columns;
       and (xii) the worldwide or EEA-wide market for LF detection systems.
7.     MODIFICATION OF THE TRANSACTION
7.1.   Framework for the assessment of the commitments
(699) The following principles, as referred to in the Commission Regulation (EC) No
       802/2004 and in the Commission Notice on remedies acceptable under the Merger
       Regulation (the “Remedies Notice”)524 apply where parties to a concentration choose
       to offer commitments in order to restore effective competition following serious
       doubts identified by the Commission with a view to having the transaction approved
       in phase 1.
(700) In phase 1, commitments offered by the parties can only be accepted where the
       competition problem is readily identifiable and can easily be remedied. The
       competition problem therefore needs to be so straightforward and the remedies so
       clear-cut that it is not necessary to enter into an in-depth investigation and that the
       commitments are sufficient to clearly rule out serious doubts within the meaning of
       Article 6(1)(c) of the Merger Regulation. Where the assessment confirms that the
       proposed commitments remove the grounds for serious doubts on this basis, the
       Commission clears the merger in phase 1.
(701) In assessing whether the proposed commitments will likely eliminate the
       competition concerns identified, the Commission considers all relevant factors
       including inter alia the type, scale and scope of the proposed commitments, judged
       by reference to the structure and particular characteristics of the market in which the
       competition concerns arise, including the position of the parties and other
       participants on the market. As set out in the Remedies Notice, the commitments have
       to eliminate the competition concerns entirely, and have to be comprehensive and
       effective from all points of view. The Commission only has power to accept
       commitments that are capable of rendering the concentration compatible with the
       internal market or the functioning of the EEA Agreement in that they will prevent
       the significant impediment to effective competition in all relevant markets where
       competition concerns were identified.
(702) In order for the commitments to comply with those principles, they must be capable
       of being implemented effectively within a short period of time. The Commission
       must determine with the requisite degree of certainty, at the time of its decision, that
       they will be fully implemented and that they are likely to maintain effective
       competition in the market.
(703) As concerns the form of acceptable commitments, the Merger Regulation leaves
       discretion to the Commission as long as the commitments meet the requisite
       standard.
524 Commission's Notice on Remedies acceptable under Council Regulation (EC) No 139/2004 and under
    Commission Regulation (EC) No 802/2004, OJ C 267, 22.10.2008, p. 1.
                                                   133
 ---pagebreak--- (704) Divestiture commitments are often the most effective way to eliminate competition
       concerns resulting from horizontal overlaps. The intended effects of a divestiture
       will only be achieved if and once the business to divest is transferred to a suitable
       purchaser in whose hands it will become an active competitive force in the market.
(705) To that end, the divested activities must consist of a viable business that, if operated
       by a suitable purchaser, can compete effectively with the merged entity on a lasting
       basis and that is divested as a going concern.525 The business has to include all the
       assets which contribute to its current operation or which are necessary to ensure its
       viability and competitiveness and all personnel which is currently employed or
       which is necessary to ensure the business’ viability and competitiveness. Normally, a
       viable business is a business that can operate on a stand-alone basis, which means
       independently of the merging parties as regards the supply of input materials or other
       forms of cooperation other than during a transitory period.
(706) Even though the divestiture of an existing viable stand-alone business is normally
       required, the Commission, taking into account the principle of proportionality, may
       also consider the divestiture of businesses which have existing strong links or are
       partially integrated with businesses retained by the parties and therefore need to be
       ‘carved out’.526 The Commission will only be able to accept commitments which
       require the carve-out of a business if it can be certain that, at least at the time when
       the business is transferred to the Purchaser, a viable business on a stand-alone basis
       will be divested and the risks for the viability and competitiveness caused by the
       carve-out will thereby be reduced to a minimum.527
(707) In order to ensure that the business is divested to a suitable purchaser, the
       commitments have to include criteria to define its suitability which will allow the
       Commission to conclude that the divestiture of the business to such a purchaser will
       likely remove the competition concerns identified.
(708) An up-front buyer may be necessary in cases which cause considerable risks of
       preserving the competitiveness and saleability of the divestment business in the
       interim period until divestiture. This category comprises cases where the risks of a
       degradation of the divestment business appear to be high, in particular due to a risk
       of losing employees being key for the business, or where the interim risks are
       increased as the parties are not able to undertake the carve-out process in the interim
       period, but the carve-out process can only take place once a sales and purchase
       agreement with a purchaser is entered into. The up-front buyer provision may
       accelerate the transfer of the business to be divested — given the increased
       incentives for the parties to close the divestiture in order to be able to complete their
       own concentration — to such an extent that the commitments may allow the
       Commission to conclude with the requisite degree of certainty that those risks are
       limited and the divestiture will be effectively implemented.528
525 Remedies Notice, paragraph 23.
526 Remedies Notice, paragraph 35.
527 Remedies Notice, paragraph 36.
528 Remedies Notice, paragraph 55.
                                                  134
 ---pagebreak--- 7.2.    COMMITMENTS SUBMITTED BY THE NOTIFYING PARTY
(709) In order to render the concentration compatible with the internal market and the
        functioning of the EEA Agreement, on 27 November 2019 the Notifying Party
        submitted commitments pursuant to Article 6(2) of the Merger Regulation. The
        Notifying Party made some technical modifications on the text of the commitments
        and resubmitted them on 28 November 2019 (the “Initial Commitments”).
(710) The Commission launched a market test of the Initial Commitments on
        29 November 2019, seeking responses from competitors and customers. The
        Commission informed the Notifying Party of the results of the market test on
        6 December 2019. Following the Commission’s feedback on the market test and the
        assessment of the Initial Commitments, the Notifying Party submitted a revised set
        of commitments on 10 December 2019 (the “Final Commitments”).
(711) The Final Commitments are annexed to this decision and form an integral part of it.
7.3.    Initial Commitments
7.3.1. Description of the Initial Commitments
(712) In substance, the Initial Commitments include the divestiture of five businesses
        controlled by the Notifying Party (jointly, the “Divestment Business”): (a) the
        FortéBio molecular characterisation business from Danaher’s Molecular Devices
        subsidiary (“the FortéBio molecular characterisation business”); (b) Danaher’s Pall
        Biotech SoloHill microcarriers and the particle validation standards (“PVS”)
        business (“Microcarriers Divestment Business”); (c) Danaher’s Pall Biotech
        chromatography resins business; (d) Danaher’s Pall Biotech chromatography
        hardware business comprising conventional chromatography columns, conventional
        and single-use technology chromatography skids and BioSMB continuous
        chromatography Process Development and Process Scale skids (“Danaher’s Pall
        Biotech chromatography hardware business”); and (e) Danaher’s Pall Biotech
        Single-Use Tangential Flow Filtration ("SUT TFF") systems and stainless-steel
        Hollow Fibre TFF (“SS HF TFF”) systems business (“the TFF Divestment
        Business”).
7.3.1.1. The FortéBio molecular characterization business
(713) The FortéBio molecular characterisation business operates out of legal entity ([…])
        within Molecular Devices LLC.
(714) The FortéBio Divestment business consists of Danaher’s business in label-free
        detection (a field within molecular characterization) that offers instruments and
        consumables for BLI under its Octet and BLItz product lines, as well as for SPR
        which it offers under its Pioneer product line.
(715) It includes: (i) tangible and intangible assets; (ii) licences, permits and
        authorisations; (iii) contracts, leases, commitments and customer orders;
        (iv) customer, credit and other records; and (v) personnel, including salesforce. The
        Notifying Party furthermore undertake the required preparation work to ensure post-
        closing business continuity (notably, regarding the [certifications]). The Notifying
        Party further commits to allow the Purchaser to rely on Pall’s existing certification
        under a TSA.
                                                 135
 ---pagebreak--- 7.3.1.2. It does not include the […] trademark and logo (although a license will be provided
          for a transitory period of […], extendable by […]). Microcarriers Divestment
          Business
(716) The “Microcarriers Divestment Business” operates out of [Danaher’s organisation
        structure] located in Ann Arbor, Michigan (USA).
(717) The business transferred includes: (i) tangible and intangible assets including
        equipment and intellectual property; (ii) contracts, leases and commitments;
        (iii) customer, credit and other records; (iv) personnel (excluding those attributed to
        the activities listed below); and (v) Danaher will assist the Purchaser with
        preparation work to obtain its own [certifications] to ensure business continuity after
        the divestiture and will allow the Purchaser to rely on Pall’s existing certification
        under a TSA until it obtains it.
(718) It does not include: (ii) the rights to use the Pall brand [Danaher’s intellectual
        property rights and timeframe].
(719) The business transferred does not include: (i) back office functions; (ii) salesforce
        (but the Notifying Party commits to train the Purchaser’s salesforce under a TSA for
        [timeframe]); and (iii) Process Development Services (“PDS”), which are currently
        located in the […] facility and which provides targeted development and
        consultation services for the development of bioprocessing systems and processes.
7.3.1.3. Danaher’s Pall Biotech chromatography resins business
(720) The “Chromatography resins business” consists of […] located in Cergy (France)
        which will be transferred to the Purchaser.
(721) The business transferred includes: (i) the Cergy facility and its equipment;
        (ii) tangible and intangible assets; (iii) personnel (excluding salesforce); and
        (iv) Danaher will assist the Purchaser with preparation work for the Purchaser to
        obtain an [certifications] for the business to be transferred.
(722) The business transferred does not include: (i) salesforce (but the Notifying Party
        commits to train the Purchaser’s salesforce under a TSA); (ii) the right to use the
        Pall trade mark or the Pall logo for chromatography resins for a period of […],
        extendable by […]; and (iii) employees and facilities that are within the Cergy
        facility but unrelated to the chromatography resins operations.
7.3.1.4. Danaher’s Pall Biotech chromatography hardware business
(723) The Initial Commitments529 foresee to (i) consolidate Danaher’s activities in
        columns and skids in a segregated section of Pall’s […] facility on an interim basis;
        and to (ii) subsequently relocate these to a suitable new location in the […] area.
(724) Process development skids BioSMB continuous chromatography skids are currently
        assembled in [location], and will as per the commitments be relocated to a new
        location in […].
529 The Initial Commitments package includes the entire skids business from Pall.
                                                       136
 ---pagebreak--- (725) The business transferred includes: (i) tangible and intangible assets (including
        intellectual property rights); (ii) licences, permits and authorisations issued by any
        governmental organisation for the benefit of the hardware chromatography business;
        (iii) contracts, leases, commitments and customer orders of the hardware
        chromatography business; all customer, credit and other records; (iv) the Personnel,
        and notably the engineers, but excluding those attributed to the activities listed
        below; and (v) Danaher will assist the Purchaser with preparation work for the
        Purchaser to obtain an [certifications] for the business to be transferred.
(726) The business transferred does not include: (i) back office functions; (ii) salesforce
        (but the Notifying Party commits to train the Purchaser’s salesforce under a TSA for
        [timeframe]); and (iii) the […] Trademark, which will be licenced under a TSA.
7.3.1.5. The TFF Divestment Business
(727) Danaher’s facilities for SUT flat sheet and SS hollow fibre TFF skids are located in
        […]. The Commitments foresee that the personnel and activities in […] for these
        products will move within the facility to a segregated section. The […] activities for
        these products will be relocated to an already leased new location in […]. The […]
        activities for these products will be relocated to available space in the transferring
        […] facility. Post-closing, the […] activities will be relocated to a new location in
        the […] area. Danaher will use its Best Efforts to help the Purchaser in this
        relocation exercise.
(728) The TFF Divestment Business includes Danaher’s businesses in TFF systems (SUT)
        and hollow fibre TFF systems (conventional).
(729) The TFF Divestment Business does not include: (i) the trademark for […], although
        Danaher will license these to the purchaser for a transitory period of […];
        (ii) Danaher’s salesforce (but the Party commits to train the Purchaser’s salesforce
        under a TSA); (iii) no [location] personnel or functions will transfer (inventory will
        transfer); (iv) Danaher’s activities in the assembly of flow kit consumables and
        valves for SUT TFF skids (the Purchaser will receive a license to any trade secrets of
        the business relating to the design, manufacture and assembly of SUT flow kits); and
        (v) Danaher will assist the Purchaser with preparation work for the Purchaser to
        obtain an [certifications] for the locations to be transferred.
(730) The entire Divestment Business is complemented by a Transitional Trademark
        Licence Agreement for the retained Trademark and Logos, namely […], whereby the
        Purchaser obtains a […] license to use those Trademarks and brands for the
        Divestment Business for [timeframe]. However, no specific [timeframe].530
(731) In addition, the Initial Commitments provide for special criteria that a potential
        purchaser needs to fulfil. With regard to the entire Divestment Business, the
        Purchaser must (i) have proven expertise in the biotechnology process equipment
        and/or consumables industry; (ii) have an established presence in at least one Union
        Member State other than the United Kingdom; and (iii) have at its disposal back-
        office support functions531. With regard to the SoloHill microcarriers and PVS
530 Annex 7 of the Initial Commitments.
531 Such as IT staff and operations, general back-office software, HR functions, finance, accounting, tax and
    legal and compliance support.
                                                         137
 ---pagebreak---         business, the chromatography resins business, the chromatography hardware
        business and the SUT TFF and SS HF TFF systems businesses, the potential
        purchaser must also have at its disposal a salesforce with experience of selling and
        promoting biotechnology process equipment and/or consumables in EMEA, the
        Americas and Asia, including China.
(732) Moreover, the Notifying Party commits not to implement the Transaction before it,
        or the Divestiture Trustee, has entered into a final binding sale and purchase
        agreement for the sale of the Divestment Business and the Commission has approved
        the Purchaser and the terms of sale in accordance with the procedure set out in the
        Final Commitments.
(733) Finally, the Notifying Party has entered into related commitments, inter alia
        regarding the separation of the divested businesses from their retained businesses,
        the preservation of the viability, marketability and competitiveness of the divested
        businesses, including the appointment of a monitoring trustee and, if necessary, a
        divestiture trustee.
7.3.2. Results of the market test
(734) The commission launched a market test of the Initial Commitments on 29 November
        2019, which was addressed to competitors and customers. Overall, the feedback of
        the market test was positive as to the elimination of competition concerns by the
        proposed commitments.532
(735) With respect to all the areas of concern, the majority of the respondents who
        expressed an opinion on this point considered that after the transfer of the entire
        Divestment Business, the suitable Purchaser would be able to operate it as a viable
        competition constraint to the merged entity.533
(736) The majority of market respondents consider that the purchaser criteria are
        appropriate to identify a suitable purchaser the Divestment Business.534 Two market
        respondents expressed the opinion on this point that the potential purchaser should
        not discontinue the Divestment Business: “it should be added to above
        considerations that the Divestment Business should not be discontinued by the
        purchaser”, “The criteria selected are acceptable to guarantee customers that the
        business will see continuity, as it is a very specialized market segment. As mentioned
        in point F.1.1 the issue will be having the purchaser guarantee they will not
        discontinue product lines, as a potential company which fits the selection criteria
        listed would inevitably be a company which already has similar products on the
        market”.535
532 Market test questionnaire, question E.B.1 (FortéBio molecular characterisation business); questions D.B.1
    and D.B.2 (TFF Divestment business); question A.B.1 (Microcarriers Divestment Business);
    question C.B.1 (Danaher’s Pall Biotech chromatography resins business); question B.B.1, B.B.2
    and B.B.3 (Danaher’s Pall Biotech chromatography hardware business).
533 Market test questionnaire, question F.1 (Entire Divestment Business Package), question E.B.2 (FortéBio
    Divestment Business); question D.B.3 (TFF Divestment business); question A.B.2 (Microcarriers
    Divestment Business); question C.B.2 (Danaher’s Pall Biotech chromatography resins business);
    question B.B.2 (Danaher’s Pall Biotech chromatography hardware business).
534 Market test questionnaire, question F.A.1.
535 Market test questionnaire, question F.A.1.1.
                                                        138
 ---pagebreak--- (737) However, with respect to the different commitments packages, some additional areas
        for improvement were identified:
        (a)      With the exception of the FortéBio business, the commitment does not
                 include a ‘go-to-market’ sales staff. While the purchaser criteria require a
                 suitable purchaser to have its own sales organisation, several respondents
                 highlighted that the lack of sales force in the commitments package may
                 impede upon the competitiveness of the divested businesses.536
        (b)      While the Notifying Party proposes transitional license agreements for brands
                 that are used by the divestment businesses537, and as well by the retained
                 business, several respondents considered that the length of the transitional
                 licensing agreements would not be long enough.
        (c)      Moreover, the feedback was mixed as to whether a change in the brand name
                 of products that are specified in the regulatory filings would require a
                 modification of the regulatory approval and how cumbersome this would be.
                 The majority of the market respondents who expressed an opinion on this
                 point were not worried about the impact of the brand change in the regulatory
                 filling for Danaher’s Pall Biotech chromatography resins business538 and
                 Danaher’s Pall Biotech chromatography hardware business.539
        (d)      Regarding the Danaher’s Pall Biotech chromatography hardware business,
                 some market participants expressed their worries about the relocation of
                 continuous chromatography in the […]540 area and of the rest of the activities
                 in the […] area541. In particular, these moves would create uncertainties about
                 the losses of know-how and technical capabilities; there would also be a need
                 to limit the distance to the new facilities as much as possible.
        (e)      Regarding the Danaher’s Pall Biotech chromatography resins business, some
                 respondents specified that the [supply source] agreement for Protein A and
                 the membrane chromatography should be included in the commitments
                 package.542
        (f)      Regarding the filtration skids remedy, some market participants indicated the
                 importance for the Purchaser to have associated consumables (filters and
                 flow kits, as discussed further below).
        (g)      The results of the market test were mixed as to whether the exclusion of the
                 PDS will hinder the Purchaser’s ability to operate the Microcarriers
                 Divestment Business as a viable and competitive force.543
536 Market test questionnaire, questions B.D.5, C.D.5 and D.D.5.
537 Danaher’s Pall Biotech chromatography resins business, Danaher’s Pall Biotech chromatography
    hardware business, the TFF Divestment Business.
538 Market test questionnaire, question C.C.4.
539 Market test questionnaire, question B.C.4.
540 Market test questionnaire, question B.B.6.
541 Market test questionnaire, question B.C.5.
542 Market test questionnaire, question C. B.1.1.
543 Market test questionnaire, question A.B.4.
                                                        139
 ---pagebreak--- 7.3.3. The Commission’s assessment of the Initial Commitments
7.3.3.1. Scope of the Divestment Businesses
(738) The Commission firstly notes that the Initial Commitments remove the full overlap
        in those markets where the transaction would have raised serious doubts as to its
        compatibility with the internal market and the EEA-Agreement, namely (i) the
        worldwide market for microcarriers (either overall, or in the potential markets for
        microporous microcarriers, animal-based microcarriers, non-animal-based
        microcarriers, cationic microcarriers or collagen-coated microcarriers); (ii) the
        worldwide or EEA-wide market for TFF systems (SUT); (iii) the worldwide or EEA-
        wide market for flat sheet TFF systems (SUT); (iv) the worldwide market for hollow
        fibre TFF systems (conventional); (v) worldwide or EEA-wide market for stainless
        steel chromatography skids; (vi) the worldwide or EEA-wide market for SUT
        chromatography skids; (vii) the worldwide or EEA-wide market for continuous
        chromatography skids; (viii) the worldwide or EEA-wide market for non-Protein A
        affinity resins; (ix) the worldwide or EEA-wide market for ion exchange resins; (x)
        the worldwide or EEA-wide market for mixed-mode resins; (xi) the worldwide or
        EEA-wide market for chromatography columns; and (xii) the worldwide or EEA-
        wide market for LF detection systems. Thus, the Commission considers the Initial
        Commitments in principle to be sufficiently broad to address the identified
        competition concerns.
(739) Moreover, the Commitments only comprise assets from the Notifying Party and
        therefore do not include any mix-and-match elements, which allows the Purchaser to
        realise certain efficiencies (in particular as regards the Chromatography Hardware
        and TFF Divestment Businesses.
(740) The Commission, however, notes that the Chromatography Hardware and TFF
        Divestment Businesses do not constitute stand-alone businesses and form currently
        part of a larger business that also includes other product areas that are not being
        divested. The Commitments foresee that the activities for divestiture will be
        segregated within the facilities where they are currently located, and subsequently
        moved to new locations in the proximity. The Commission considers that this may
        entail complexities and risks to be carefully assessed. In this context, the
        Commission firstly considers the nature of the activities carried out by the
        Chromatography Hardware and TFF Divestment Businesses. After the design or
        customisation of the design of a specific chromatography or TFF hardware, which is
        carried out [production secrets], all of which will be transferred or made available to
        the Purchaser as part of the Chromatography Hardware and TFF Divestment
        Business). The Commission moreover notes that the Chromatography Hardware
        Business was successfully moved from a different location to its current location in
        […] when Danaher acquired it in 2005. Also, a majority of respondents who
        expressed an opinion in the market test on this point took the view that the envisaged
        concentration and relocation procedure would enable the Purchaser to run the
        Hardware Chromatography and TFF Divestment Businesses as a viable and
        competitive force.544 Furthermore, the purchaser criteria require that the Purchaser
        has proven expertise in the biotechnology process equipment and/or consumables
        industry. On this basis, the Commission is able to accept the proposed carve-out as
        suitable for the Commitments in the current Transaction, in particular due to the
544 Market test questionnaire, questions B.B.5, B.B.6 and D.B.4.
                                                        140
 ---pagebreak---        nature in which the relevant activities are performed today, and in light of the
       purchaser criteria defined in the Commitments.
(741) The Commission considers that the lack of inclusion of sales personnel could entail
       risks for the Divestment Businesses to get access to the market in a timely manner.
       This concern has also been reflected in the market test where this was generally
       brought forward for each of the Divestment Businesses.545 One competitor
       considered that Divestment Business would in that regard be dependent on the
       salesforce of [Danaher].546 Overall, while a majority of respondents who expressed
       an opinion in the market test on this point did not consider any specific difficulties or
       risks associated with the fact that sales personnel would not transfer, a large minority
       did.547 Based on feedback from the market investigation, the Commission finds that
       it might take time to build up customer relationships for the products involved:
       “[s]ales personnel are the key to customers; this is an important asset, as it takes a
       long time to win a new customer, but takes only seconds to loose”548; “[s]ales
       personnel in many cases build up a long-term relationship to the purchaser”; “loss
       of built long-term business relationships and knowledge of target market needs”;
       “[f]or this kind of equipment a long term relation with clients is rather relevant
       (experience, interaction, know how and reliability). This relation needs to be
       reinstalled”.549
(742) The Commission however also takes note that a significant majority of respondents
       who expressed an opinion on this point considered that the Commitment of the
       Notifying Party to train the Purchaser’s salesforce would enable the Purchaser to run
       the Divestment Business as a viable and competitive force.550
(743) While the Commission therefore accepts that the entirety Danaher’s salesforce
       generally does not transfer with the Divestment Business, it considers that the
       Commitments should foresee flexibility in this regard, allowing some sales
       personnel to also transfer to the Purchaser.
(744) In addition, the Commission notes that the Notifying Party considered the number of
       [production secrets] that it committed to transfer for the Chromatography Hardware
       Divestment Business and TFF Divestment Business to be confidential, and that in
       that regard it was not able to obtain assurance from the market test whether this
       number would be sufficient. In particular, according to the Notifying Party,
       [production secrets].551 While there are currently a large number [production secrets]
       within Danaher’s organisation [production secrets], the Notifying Party estimated the
       number of transferring engineers for the Chromatography Hardware and TFF
       Divestment Businesses by a review of projects executed in the period 2016-2018 and
       an analysis of current pending projects.552
545 Except for the FortéBio Divestment business, which did include ‘go-to-market’ sales staff.
546 Market test questionnaire, question D.B.1.
547 Market test questionnaire, question B.D.5 and C.D.5.
548 Market test questionnaire, question A.D.5.1.
549 Market test questionnaire, question D.D.1, question F.1.1.
550 Market test questionnaire, questions A.D.6, B.D.6, C.D.6 and D.D.6.
551 Form RM, paragraph 283.
552 Form RM, footnotes 32 (chromatography) and 61 (TFF).
                                                         141
 ---pagebreak--- (745) In light of the above, the Commission considers that overall the scope of the
        Divestment Business appears to be sufficient as regards the number of engineers
        who are transferring, and that the lack of a general sales team appears to be
        compensated by the special purchaser criteria in combination with the respective
        training commitment. That being said, the Commission considers that it would be
        necessary to fine-tune the number of transferring engineers and sales personnel in
        light of the identity of the Purchaser.
(746) The Commission notes that one complainant considers that the scope of the
        divestment is not wide enough, in that a divestiture of Danaher’s entire SUT and
        stainless steel hardware should be included. In this regard, the Commission notes
        that the entire SUT TFF business of Danaher is included in the Commitments, as
        well as the stainless steel systems for hollow fibre. While the stainless steel flat sheet
        systems are not included, as set out in section 4.5.3.3 above, the Commission did not
        find serious doubts in that respective area. Moreover, the Commission takes note of
        the Notifying Party’s argument that an inclusion of its stainless steel flat sheet
        systems into the commitments would not be warranted in order to ensure the
        viability and competitiveness of the TFF Divestment Business, as (1) customers do
        not require suppliers to be active in all TFF systems segments, (2) transferring the
        Notifying Party’s stainless steel flat sheet systems activities, which are [production
        secrets] would only add low-added value services to the TFF Divestment Business,
        such as logistics and procurement and support, as well as space for factory
        acceptance testing, and (3) the Divestment Business as a whole does not make or
        procure [production secrets]. Thus, the Commission considers that the inclusion of
        the Notifying Party’s stainless steel flat sheet TFF activities is not be warranted for
        viability purposes.
(747) As regards the concern that the Chromatography resins business does not include the
        supply agreement with [supply source] for Protein A, the Commission notes that this
        has been terminated and hence cannot be transferred. Moreover, the Commission
        does not find that the Transaction raises serious doubts as to its compatibility with
        the internal market or the functioning of the EEA Agreement in relation to the
        supply of Protein A. Likewise, the Commission does not raise serious doubts in
        relation to membrane chromatography and therefore considers that the respective
        activities doesn’t need to be included in the commitments.
(748) Finally, a complainant who had in the market investigation been concerned on
        potential conglomerate effects brought forth by the proposed Transaction (as set out
        in sections 4.9.2 and 4.9.3) reiterated its concerns in the market test, and concluded
        that the proposed Commitments would not address these. However, as set out in
        section 4.9.4, the Commission does not raise serious doubts as regards the
        compatibility of the proposed Transaction in the internal market or the functioning of
        the EEA Agreement as regards conglomerate effects. This complainant also
        considered that the Commitments would not address its concerns in an overall
        market of TFF systems, for which the Commission points out that it did not find
        serious doubts either, as set out in section 4.5.3.3.
7.3.3.2. Viability and competitiveness of the Divested Businesses
(749) While a majority of respondents who expressed an opinion in the market test on this
        point indicated that they did not see any specific difficulties or risks associated with
                                                   142
 ---pagebreak---         the transitory supply or service agreements to the Purchaser,553 the Commission
        found that the commitment to not transfer certain of Danaher’s brands but instead to
        license these for a transitory period could pose difficulties to customers. The
        Commission recalls that once customers have specified a product in their production
        process, it might be difficult for them to replace such a product, given the
        requirements in terms of validation and regulatory filings. In this regard, the market
        test namely revealed that a change in brand name might also have an impact on the
        validity of a product concerned in a regulatory filing.554 Also, several respondents
        questioned whether the transitional trademark licence agreements were sufficiently
        long to allow the Purchaser to successfully rebrand the respective products.
(750) The Commission furthermore considers that it would be important for the Purchaser
        to offer associated consumables to go with the TFF divestment business, as indicated
        also in paragraph (242), as well as flow kits, which are an integral part of SUT TFF
        skids.
(751) This was also reflected by comments of several respondents in the market
        investigation.555 In this regard, the Commission will pay particular attention in the
        buyer approval for the Purchaser to be able and incentivised to compete in light of,
        inter alia, its offering of consumables.
(752) Similarly, several respondents indicated the importance for the Purchaser to be able
        to supply the flow kits that go with the SUT TFF skids. A minority of respondents to
        the market test that took a position considered that the exclusion thereof would
        hinder the Purchaser’s ability to operate the TFF Divestment Business as a viable
        and competitive force.556 The Commission in this regard notes that the Commitments
        foresee to transfer Danaher’s manufacturing capabilities to the Purchaser, and that,
        according to the Notifying Party, its internal estimates suggest that “[Danaher’s]
        flow kits account for only about […]% of the expected flow kit consumption
        associated with [its] SUT TFF systems”.557 Nonetheless, in order to safeguard what
        could potentially be a vital element, the Commission will pay particular attention in
        the buyer approval process for the Purchaser to be able to replicate Danaher’s
        production of these flow kits.
7.3.3.3. Potential purchaser
(753) In response to the market test, more than 10 companies active in the bioprocessing
        industry expressed a general interest in the acquisition of the Divestment Business or
        parts thereof.558 The Commission also notes that the Notifying Party has already
        entered into a sales and purchase agreement for parts of the Divestment Business
        with Sartorius and is currently negotiating to extend the sales and purchase
        agreement to the entire Divestment Business.
(754) In this context, the Commission also notes that a large majority of respondents who
        expressed an opinion on this point considered Sartorius to be a suitable purchaser for
553 Market test questionnaire, questions A.D.4, B.D.4, C.D.4, D.D.4 and E.D.4.
554 Market test questionnaire, questions A.D.4, B.D.4, C.D.4, D.D.4 and E.D.4.
555 Market test questionnaire, questions D.B.1.1 and D.B.3.1.
556 Market test questionnaire, question D.B.3.1, D.B.6 and D.B.6.1.
557 RFI 19, question 13.
558 Market test questionnaire, question F.A.5.
                                                        143
 ---pagebreak---         the Divestment Business, if proposed by the Notifying Party.559 Nevertheless, the
        assessment of the suitability of any proposed purchaser by the Commission would be
        a subject of a separate procedure, as envisaged under the Initial Commitments.
(755) The Commission also notes the Notifying Party's commitment not to implement the
        Transaction before the Commission approves the Purchaser, which further limits the
        risk related to not finding a suitable purchaser.
(756) In light of the foregoing, the Commission considers that there is sufficient credible
        interest for the acquisition of the Divestment Business by potential purchasers.
7.3.3.4. Conclusion on the Initial Commitments
(757) On the basis of the above, the Commission concludes that the Initial Commitments
        could generally be suitable to address the competition concerns identified by the
        Commission in sections 4.3-4.6. However, as explained in section 7.3.3, the Initial
        Commitments showed certain shortcomings which could negatively impact on the
        viability and competitiveness of the Divestment Business.
7.4.    Final Commitments
7.4.1. Description of the Final Commitments
(758) The Final Commitments essentially follow the structure of the Initial Commitments.
        The Notifying Party made improvements to address the shortcomings identified
        during the market test. In particular, the Final Commitments include
        (a)      a commitment at the option of the Purchaser to transfer a specified number of
                 sales personnel in North America, Europe and Asia should the Purchaser’s
                 sales organisation be augmented by the transferring Microcarriers Divestment
                 Business; the chromatography resins business; the chromatography hardware
                 business, and the TFF Divestment Business.
        (b)      a commitment at the option of the Purchaser to transfer to the Purchaser a
                 maximum of [production process] in [location], as the case may be.
        (c)      a commitment at the option of the Purchaser to transfer the PDS personnel,
                 which are not included in the Microcarriers Divestment Business;
        (d)      as regards the transitional trade mark licence agreements for the
                 non-transferring trademarks and logos ([…]), the Final Commitments clarify
                 that the general term shall be […], extendable by a period of […] at the
                 request of the Purchaser and followed by a […];
        (e)      a commitment at the request of the Purchaser to extend on a customer
                 specific basis […];
        (f)      a commitment at the request of the Purchaser to extend on a customer
                 specific basis […];
559 Market test questionnaire, question F.A.6.
                                                   144
 ---pagebreak---        (g)      as regards the transitional supply agreement for flow kit consumables, it has
                been clarified that this should be (i) at cost; or (ii) at current terms and
                conditions, whichever is lower.
7.4.2. Assessment of the Final Commitments
(759) The Commission considers that the Final Commitments effectively address the
       specific shortcomings of the Initial Commitments.
(760) The Commission notes the importance for the Purchaser to find a suitable location in
       […], in order to guarantee the viability and competitiveness of the Chromatography
       Hardware and TFF Divestment Business, and will pay particular attention in the
       buyer approval process to the respective planning and efforts made by the Purchaser
       in this regard.
(761) The Commission will also pay particular attention in the buyer approval process for
       the Purchaser to be able and incentivised to (i) replicate Danaher’s production of
       flow kits that are used with SUT TFF systems; and (ii) compete with the TFF
       Divestment Business in light of, inter alia, its offering of consumables.
7.4.3. Conclusion on the Final Commitments
(762) For the reasons outlined above, the Final Commitments made by the Notifying Party
       are sufficient to eliminate the Commission’s serious doubts, identified in
       sections 4.3-4.6, as to the compatibility of the Transaction with the internal market
       and the functioning of the EEA Agreement.
8.     CONDITIONS AND OBLIGATIONS
(763) Under the first sentence of the second subparagraph of Article 6(2) of the Merger
       Regulation, the Commission may attach to its decision conditions and obligations
       intended to ensure that the undertakings concerned comply with the commitments
       they have entered vis-à-vis the Commission with a view to rendering the
       concentration compatible with the internal market
(764) The fulfilment of the measures that gives rise to the structural change of the market
       is a condition, whereas the implementing steps that are necessary to achieve this
       result are generally obligations on the parties. Where a condition is not fulfilled, the
       Commission's decision declaring the concentration compatible with the internal
       market is no longer applicable. Where the undertakings concerned commit a breach
       of an obligation, the Commission may revoke the clearance decision in accordance
       with Article 6(3) of the Merger Regulation. The undertakings concerned may also be
       subject to fines and periodic penalty payments under Articles 14(2) and 15(1) of the
       Merger Regulation.
(765) In accordance with the basic distinction between conditions and obligations
       described in the preceding paragraph, the commitments in section B, and the
       respective Schedules 1 to 5 and their annexes of the Annex constitute conditions
       attached to this decision, as only through full compliance therewith can the structural
       changes in the relevant markets be achieved. The other commitments set out in the
       Annex constitute obligations, as they concern the implementing steps which are
       necessary to achieve the modifications sought in a manner compatible with the
       internal market and the functioning of the EEA Agreement.
                                                  145
 ---pagebreak--- 9.    CONCLUSION
(766) For the above reasons, the Commission has decided not to oppose the notified
      operation as modified by the commitments and to declare it compatible with the
      internal market and with the functioning of the EEA Agreement, subject to full
      compliance with the conditions in section B, and the respective Schedules 1 to 5 and
      their annexes of the commitments annexed to this decision and with the obligations
      contained in the other sections of the said commitments. This decision is adopted in
      application of Article 6(1)(b) in conjunction with Article 6(2) of the Merger
      Regulation and Article 57 of the EEA Agreement.
                                                    For the Commission
                                                    (Signed)
                                                    Margrethe VESTAGER
                                                    Executive Vice-President
                                               146
 ---pagebreak---                                          10 December 2019
By hand, email and fax: 00 32 2 296 4301
European Commission
DG Competition
Place Madou 1
1210 Saint-Josse-ten-Noode, Belgium
                        Case M. 9331 – Danaher / GE Biopharma
           COMMITMENTS TO THE EUROPEAN COMMISSION
 Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 as amended (the “Merger
 Regulation”), Danaher Corporation (“Danaher”) proposes the following Commitments (the
 “Commitments”) vis-à-vis the European Commission (the “Commission”) with a view to
 rendering the acquisition of sole control by Danaher over the General Electric Company’s
 (“GE’s”) Healthcare Life Sciences Biopharma Business (“GE Biopharma”) (GE, together with
 Danaher, referred to as the “Parties”) by means of an acquisition of equity and assets (the
 “Concentration”) compatible with the internal market and the functioning of the EEA Agreement.
 This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) of
 the Merger Regulation to declare the Concentration compatible with the internal market and the
 functioning of the EEA Agreement (the “Decision”), in the general framework of European Union
 law, in particular in light of the Merger Regulation, and by reference to the Commission Notice on
 remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission
 Regulation (EC) No 802/2004 (the “Remedies Notice”).
 The Commitments shall take effect upon the date of adoption of the Decision (the “Effective
 Date”).
                                                      1
 ---pagebreak---                                                  Table of Contents
Section A.      Definitions..................................................................................................3
Section B.      The commitment to divest and the Divestment Businesses .......................4
a) FortéBio molecular characterisation business .............................................................5
b) SoloHill microcarriers and PVS business ....................................................................6
c) Chromatography resins business .................................................................................7
d) Chromatography hardware business ............................................................................8
e) SUT TFF and SS HF TFF systems businesses ............................................................8
Section C.      Related commitments.................................................................................9
Section D.      The Purchaser...........................................................................................11
Section E.      Trustee......................................................................................................12
Section F.      The review clause ....................................................................................17
Section G.      Entry into force ........................................................................................17
Schedule 1 - The FortéBio Divestment Business ..............................................................18
Schedule 2 - The Microcarriers and PVS Divestment Business ........................................20
Schedule 3 - The Chromatography Resins Divestment Business ......................................22
Schedule 4 - The Chromatography Hardware Divestment Business .................................24
Schedule 5 - The SUT TFF and SS HF TFF Systems Divestment Business .....................27
Annex 1 on the FortéBio Divestment Business Organisational Chart ...............................30
Annex 2 on the FortéBio Divestment Business Intellectual Property ...............................30
Annex 3 on Potential Services to be Provided to the Divestment Businesses ...................30
Annex 4 on the FortéBio Divestment Business Main Suppliers........................................30
Annex 5 on the FortéBio Divestment Business Main Customers......................................30
Annex 6 on Supply and Services Agreement ....................................................................30
Annex 7 on Transitional Trademark License Agreement ..................................................30
Annex 8 on the Microcarriers and PVS Divestment Business Organisational Chart ........30
Annex 9 on the Microcarriers and PVS Divestment Business Intellectual Property.........30
Annex 10 on the Microcarriers and PVS Divestment Business Main Suppliers ...............30
Annex 11 on the Microcarriers and PVS Divestment Business Main Customers .............30
Annex 12 on the Chromatography Resins Divestment Business Organisational Chart ....30
Annex 13 on the Chromatography Resins Divestment Business Intellectual Property .....30
Annex 14 on the Chromatography Resins Divestment Business Main Suppliers .............31
Annex 15 on the Chromatography Resins Divestment Business Main Customers ...........31
Annex 16 on the Chromatography Hardware Divestment Business Organisational
Chart           ..................................................................................................................31
Annex 17 on the Intellectual Property Licence Agreement ...............................................31
Annex 18 on the Chromatography Hardware Divestment Business Intellectual
Property        ..................................................................................................................31
Annex 19 on the Chromatography Hardware Divestment Business Main Suppliers ........31
Annex 20 on the Chromatography Hardware Divestment Business Main Customers ......31
Annex 21 on the Chromatography Hardware Divestment Business Personnel .................31
Annex 22 on the SUT TFF and SS HF TFF Systems Divestment Business
Organisational Structure ....................................................................................................31
Annex 23 on Potential Services to be Provided to the SUT TFF and SS HF TFF
Systems Divestment Businesses ........................................................................................31
Annex 24 on SUT TFF and SS HF TFF systems Main Suppliers .....................................31
Annex 25 on SUT TFF and SS HF TFF systems Main Customers ...................................31
Annex 26 on SUT TFF and SS HF TFF systems Divestment Business Personnel ...........31
                                                                    2
 ---pagebreak--- Section A.       Definitions
1. For the purpose of the Commitments, the following terms shall have the following meaning:
    Affiliated Undertakings: undertakings controlled by the Notifying Party, whereby the notion
    of control shall be interpreted pursuant to Article 3 of the Merger Regulation and in light of
    the Commission Consolidated Jurisdictional Notice under Council Regulation (EC)
    No 139/2004 on the control of concentrations between undertakings (the "Consolidated
    Jurisdictional Notice").
    Assets: the assets that contribute to the current operation or are necessary to ensure the
    viability and competitiveness of the Divestment Businesses as indicated in Section B and
    described more in detail in the Schedules and Annexes.
    Best Efforts: Best effort obligations shall be interpreted solely in light of the Commission’s
    decision pursuant to Article 6(1)(b) of the Merger Regulation to declare the Concentration
    compatible with the internal market and the functioning of the EEA Agreement, the Merger
    Regulation and the general principles of EU law.
    Closing: the transfer of the legal title and/or assets of the Divestment Businesses to the
    Purchaser.
    Closing Period: the period of […] from the approval of the Purchaser and the terms of sale by
    the Commission.
    Confidential Information: any business secrets, know-how, commercial information, or any
    other information of a proprietary nature that is not in the public domain.
    Conflict of Interest: any conflict of interest that impairs the Trustee’s objectivity and
    independence in discharging its duties under the Commitments.
    Divestment Businesses: the businesses as defined in Section B and in the Schedules that the
    Notifying Party commit to divest.
    Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the
    Commission and appointed by the Notifying Party and who has/have received from the
    Notifying Party the exclusive Trustee Mandate to sell the Divestment Businesses to a
    purchaser at no minimum price.
    Effective Date: the date of adoption of the Commission’s 6(1)(b) decision.
    First Divestiture Period: the period of […] from the Effective Date.
    Hold Separate Manager: the person(s) appointed by the Notifying Party for the Divestment
    Businesses to manage the day-to-day business under the supervision of the Monitoring
    Trustee.
    Key Personnel: all personnel necessary to maintain the viability and competitiveness of the
    Divestment Businesses, as listed in the Schedules, including the Hold Separate Manager(s).
    Monitoring Trustee: one or more natural or legal person(s) who is/are approved by the
    Commission and appointed by the Notifying Party, and who has/have the duty to monitor the
    Notifying Party’s compliance with the conditions and obligations attached to the Decision.
    Notifying Party: Danaher Corporation with its registered office at 2200 Pennsylvania Ave.
    N.W., Suite 800W, Washington, D.C., USA.
    PD: Process Development
    Parties: the Notifying Party and General Electric Company, with its registered office at
    3135 Easton Turnpike Fairfield, Connecticut 0682, USA.
                                                      3
 ---pagebreak---       Personnel: all staff currently employed by the Divestment Businesses, including staff
      seconded to the Divestment Businesses, shared personnel as well as the additional personnel
      listed in the Schedules.
      Purchaser: Sartorius AG, a stock corporation (Aktiengesellschaft) incorporated under the
      laws of Germany, or any other entity approved by the Commission as acquirer of Divestment
      Businesses in accordance with the criteria set out in paragraph 37 of these Commitments.
      Purchase Agreement: the purchase agreement entered into on 18 October 2019 whereby
      Sartorius undertakes to acquire the Divestment Businesses1 or any equivalent purchase
      agreement where an alternate Purchaser undertakes to acquire the Divestment Businesses.
      Purchaser Criteria: the criteria laid down in paragraph 37 of these Commitments that the
      Purchaser must fulfil in order to be approved by the Commission.
      PVS: Particle Validation Standards.
      Schedules: the schedules to these Commitments describing more in detail the Divestment
      Businesses.
      SSA: Supply and Service Agreement.
      SUT: Single Use Technology
      Trustee: the Monitoring Trustee and/or the Divestiture Trustee as the case may be.
      Trustee Divestiture Period: the period of […] from the end of the First Divestiture Period.
      TSA: Transition Services Agreement.
  Section B.        The commitment to divest and the Divestment Businesses
         Commitment to divest
  2. In order to maintain effective competition, the Notifying Party commits to divest, or procure
      the divestiture of the Divestment Businesses to the Purchaser by the end of the Trustee
      Divestiture Period as a going concern and on terms of sale approved by the Commission in
      accordance with the procedure described in paragraph 38 of these Commitments. To carry out
      the divestiture, the Notifying Party commits to find a purchaser and to enter into a final
      binding sale and purchase agreement for the sale of the Divestment Businesses within the First
      Divestiture Period. If the Notifying Party has not entered into such an agreement at the end of
      the First Divestiture Period, the Notifying Party shall grant the Divestiture Trustee an
      exclusive mandate to sell the Divestment Businesses in accordance with the procedure
      described in paragraph 49 of these Commitments in the Trustee Divestiture Period. The
      divestiture of the Divestment Businesses shall not be implemented unless and until the
      Commission has approved the terms of divestiture in accordance with these Commitments.
  3. The proposed concentration shall not be implemented before the Notifying Party or the
      Divestiture Trustee has entered into a final binding sale and purchase agreement for the sale of
1   On 18 October 2019, the Notifying Party concluded a Purchase Agreement with Sartorius AG to acquire
    the Divested Businesses described in Section B.(a) to (d) above. A copy of this Purchase Agreement has
    been submitted to the European Commission on 22 October 2019. Pursuant to Article X (Conditions to
    Closing), section 10.1(a), the obligations of each party under the Purchase Agreement are subject to all
    required approvals having been obtained, including that of the European Commission. The Notifying Party
    is currently negotiating with Sartorius AG an amendment to the Purchase Agreement to include the
    Divested Business described in Section B.(e) above.
                                                          4
 ---pagebreak---     the Divestment Business and the Commission has approved the Purchaser and the terms of
    sale in accordance with paragraph 38 of these Commitments.
 4. The Notifying Party shall be deemed to have complied with these Commitments if
       (a)       by the end of the Trustee Divestiture Period, the Notifying Party or the Divestiture
                 Trustee has entered into a final binding sale and purchase agreement for the
                 Divestment Businesses and the Commission approves the proposed purchaser and
                 the terms of sale as being consistent with the Commitments in accordance with the
                 procedure described in paragraph 38 of these Commitments and
       (b)       the Closing of the sale of the Divestment Businesses to the Purchaser takes place
                 within the Closing Period.
 5. In order to maintain the structural effect of the Commitments, the Notifying Party shall, for a
    period of […] after the Effective Date, not acquire, whether directly or indirectly, the
    possibility of exercising influence (as defined in paragraph 42 of the Remedies Notice,
    footnote 3) over the whole or part of the Divestment Businesses, unless, following the
    submission of a reasoned request from the Notifying Party showing good cause and
    accompanied by a report from the Monitoring Trustee (as provided in paragraph 63 of these
    Commitments), the Commission finds that the structure of the market has changed to such an
    extent that the absence of influence over the Divestment Business or Businesses is no longer
    necessary to render the proposed concentration compatible with the internal market.
       Structure and definition of the Divestment Businesses
 6. The Divestment Businesses consist of the divestiture of five businesses:
       (a)       the Notifying Party’s MolDev FortéBio molecular characterization business;
       (b)       the Notifying Party’s Pall Biotech SoloHill microcarriers and PVS business;
       (c)       the Notifying Party’s Pall Biotech chromatography resins business;
       (d)       the Notifying Party’s Pall Biotech chromatography hardware business comprising
                 conventional chromatography columns, conventional and single-use technology
                 chromatography skids and BioSMB continuous chromatography Process
                 Development and Process Scale skids; and
       (e)       the Notifying Party’s Pall Biotech Single-Use Tangential Flow Filtration ("SUT
                 TFF") systems and stainless-steel Hollow-Fibre TFF (“SS HF TFF”) systems
                 business.
a)     FortéBio molecular characterisation business
 7. FortéBio is a provider of analytical systems designed to accelerate biotherapeutic drug
    discovery and development. The business manufactures molecular characterisation
    instruments and consumables and provides services for those instruments. FortéBio’s main
    analytical technology is bio-layer interferometry (“BLI”), which is used in its Octet and BLItz
    product lines. The company also offers instruments based on surface plasmon resonance
    (“SPR”) technology, which is used in its Pioneer product line. Molecular characterisation
    consumables include potentiometric sensors and reagents used with molecular characterisation
    instruments.
 8. The legal and functional structure of this business as operated to date is described in
    Schedule 1. The FortéBio molecular characterisation business, described in more detail in
                                                      5
 ---pagebreak---      Schedule 1 and Annexes, includes all assets and staff that contribute to the current operation
     or are necessary to ensure the viability and competitiveness of the business, in particular:
        (a)        the legal entity […]
        (b)        all tangible and intangible assets (including intellectual property rights);
        (c)        all licences, permits and authorisations issued by any governmental organisation
                   for the benefit of the FortéBio molecular characterisation business;
        (d)        all contracts, leases, commitments and customer orders of the FortéBio molecular
                   characterisation business; all customer, credit and other records; and
        (e)        the Personnel to the extent described in Schedule 1.
 9. In addition, the FortéBio molecular characterisation business includes the benefit, for a
     transitional period of up to […] and on terms and conditions equivalent to those at present
     afforded to the business or at cost, of all current arrangements under which the Notifying Party
     or its Affiliated Undertakings supply products or services to the FortéBio molecular
     characterisation business, as detailed in Schedule 1 and relevant Annexes. The Commission
     may, in response to a reasoned request from the Purchaser showing good cause, extend the
     duration of the transitional period by up to […]. This request shall be accompanied by a report
     from the Monitoring Trustee, who shall, at the same time send a non-confidential copy of the
     report to the Notifying Party.
 10. Strict firewall procedures (e.g. IT segregation) will be adopted so as to ensure that any
     competitively sensitive information relating to, or arising from such abovementioned
     arrangements (for example, product roadmaps) will not be shared with, or passed on to, anyone
     outside of the divestment business’ operations, beyond what is reasonably required for the
     compliance with the obligations relating to the SSAs and/or TSAs.
b)      SoloHill microcarriers and PVS business
 11. The Notifying Party manufactures and sells microcarriers. The business operates out of […]
     (SoloHill), located in Ann Arbor, Michigan.
 12. Microcarriers are consumables used in cell culture bioprocessing. They provide a surface for
     the anchorage dependent cells to attach and grow in cell culture vessels and bioreactors for
     adherent cell culture. SoloHill manufactures and sells different types of microcarriers
     (e.g., plastic, collagen-coated, Fact III, Plastic Plus, Star-Plus and Hillex) used in various cell
     culture applications, vaccine, rProtein and stem cell production.
 13. SoloHill also offers PVS, which includes kits and support for biopharmaceutical companies to
     identify contaminants during bioprocessing and compare the level of contamination against
     manufacturing standards
 14. The legal and functional structure of this business as operated to date is described in
     Schedule 2. The SoloHill microcarriers and PVS business, described in more detail in
     Schedule 2 and Annexes, includes all assets and staff that contribute to the current operation or
     are necessary to ensure the viability and competitiveness of the business, in particular:
        (a)        all tangible and intangible assets (including intellectual property rights);
        (b)        all contracts, leases, commitments and customer orders of the SoloHill
                   microcarriers and PVS business; all customer, credit and other records; and
        (c)        the Personnel as described in Schedule 2.
                                                         6
 ---pagebreak---  15. In addition, the SoloHill microcarriers and PVS business includes the benefit, for a transitional
     period of up to […] and on terms and conditions equivalent to those at present afforded to the
     business or at cost, of all current arrangements under which Danaher or its Affiliated
     Undertakings supply products or services to the SoloHill microcarriers and PVS business, as
     detailed in Schedule 2 and relevant Annexes. The Commission may, in response to a reasoned
     request from the Purchaser showing good cause, extend the duration of the transitional period
     by up to […]. This request shall be accompanied by a report from the Monitoring Trustee, who
     shall, at the same time send a non-confidential copy of the report to the Notifying Party.
 16. Strict firewall procedures (e.g. IT segregation) will be adopted so as to ensure that any
     competitively sensitive information relating to, or arising from such abovementioned
     arrangements will not be shared with, or passed on to, anyone outside of the Divestment
     Business’ operations, beyond what is reasonably required for the compliance with the
     obligations relating to the SSAs and/or TSAs.
c)      Chromatography resins business
 17. The Notifying Party manufactures and sells different types of chromatography resins.
 18. This includes ion exchange resins, mixed mode resins, and affinity resins excluding Protein A.
     The resins business operates out of a […] at Cergy, France.
 19. The legal and functional structure of this business as operated to date is described in
     Schedule 3. The Cergy chromatography resins business, described in more detail in Schedule 3
     and Annexes, includes all assets and staff that contribute to the current operation or are
     necessary to ensure the viability and competitiveness of the business, in particular:
        (a)        all tangible and intangible assets (including intellectual property rights and a
                   dedicated site);
        (b)        all licences, permits and authorisations issued by any governmental organisation
                   for the benefit of the chromatography resins business;
        (c)        all contracts, leases, commitments and customer orders of the chromatography
                   resins business; all customer, credit and other records; and
        (d)        the Personnel as described in Schedule 3.
 20. In addition, the chromatography resins business includes the benefit, for a transitional period of
     up to […] and on terms and conditions equivalent to those at present afforded to the business or
     at cost, of all current arrangements under which Danaher or its Affiliated Undertakings supply
     products or services to the chromatography resins business, as detailed in Schedule 3 and
     relevant Annexes. The Commission may, in response to a reasoned request from the Purchaser
     showing good cause, extend the duration of the transitional period by up to […]. This request
     shall be accompanied by a report from the Monitoring Trustee, who shall, at the same time send
     a non-confidential copy of the report to the Notifying Party.
 21. Strict firewall procedures (e.g. IT segregation) will be adopted so as to ensure that any
     competitively sensitive information relating to, or arising from such abovementioned
     arrangements (for example, product roadmaps) will not be shared with, or passed on to, anyone
     outside of the divestment business’ operations, beyond what is reasonably required for the
     compliance with the obligations relating to the SSAs and/or TSAs.
                                                         7
 ---pagebreak--- d)      Chromatography hardware business
 22. The Notifying Party’s chromatography hardware business comprises conventional
     chromatography columns, conventional (stainless steel) and SUT chromatography skids, and
     BioSMB continuous chromatography skids (the BioSMB skids include a process development
     offering known as BioSMB PD and two process scale offerings known as BioSMB Process 80
     and 350). [Business’ future locations and business relationships].
 23. The functional structure of this business is described in Schedule 4. The chromatography
     hardware business, described in more detail in Schedule 4 and Annexes, includes all assets and
     staff that are necessary to ensure the viability and competitiveness of the business, in particular:
        (a)        all tangible and intangible assets (including intellectual property rights);
        (b)        all licences, permits and authorisations issued by any governmental organisation for
                   the benefit of the hardware chromatography business;
        (c)        all contracts, leases, commitments and customer orders of the hardware
                   chromatography business; all customer, credit and other records; and
        (d)        the Personnel, and notably the engineers, as described in Schedule 4 and Annex 21
                   on the Chromatography Hardware Divestment Business Personnel.
 24. In addition, the chromatography hardware business includes the benefit, for a transitional
     period of up to […] and on terms and conditions equivalent to those at present afforded to the
     business or at cost, of all current arrangements under which Danaher or its Affiliated
     Undertakings supply products or services to the chromatography hardware business, as detailed
     in Schedule 4 and relevant Annexes. The Commission may, in response to a reasoned request
     from the Purchaser showing good cause, extend the duration of the transitional period by up to
     […]. This request shall be accompanied by a report from the Monitoring Trustee, who shall, at
     the same time send a non-confidential copy of the report to the Notifying Party.
 25. Strict firewall procedures (e.g. IT segregation) will be adopted so as to ensure that any
     competitively sensitive information relating to, or arising from such abovementioned
     arrangements (for example, product roadmaps) will not be shared with, or passed on to, anyone
     outside of the divestment business’ operations, beyond what is reasonably required for the
     compliance with the obligations relating to the SSAs and/or TSAs.
e)      SUT TFF and SS HF TFF systems businesses
 26. The Notifying Party’s SUT TFF and SS HF TFF systems businesses comprise filtration systems
     used to separate and purify biomolecules in bioprocessing. Danaher designs, manufactures and
     sells SUT TFF systems and SS HF TFF systems. Each system is tailored to specific customer
     needs. Danaher conducts some design, assembly, and/or testing of the divested TFF systems in
     facilities located in […].
 27. The legal and functional structure of this business as operated to date is described in
     Schedule 5.
 28. The Notifying Party’s SUT TFF and SS HF TFF systems businesses, described in more detail
     in Schedule 5 and Annexes, include all assets and staff that contribute to the current operation
     or are necessary to ensure the viability and competitiveness of the business, in particular:
        (a)        all tangible and intangible assets (including intellectual property rights);
                                                         8
 ---pagebreak---        (b)       all licences, permits and authorisations issued by any governmental organisation
                 for the benefit of the Notifying Party’s SUT TFF and SS HF TFF systems
                 businesses;
       (c)       all contracts, leases, commitments and customer orders of the Notifying Party’s
                 SUT TFF and SS HF TFF systems businesses; all customer, credit and other
                 records; and
       (d)       the Personnel to the extent described in Schedule 5.
29. In addition, the Notifying Party’s SUT TFF and SS HF TFF systems businesses includes the
    benefit, for a transitional period of up to […] and on terms and conditions equivalent to those at
    present afforded to the business or at cost, of all current arrangements under which Danaher or
    its Affiliated Undertakings supply products or services to the Notifying Party’s SUT TFF and
    SS HF TFF systems businesses, as detailed in Schedule 5 and relevant Annexes. The
    Commission may, in response to a reasoned request from the Purchaser showing good cause,
    extend the duration of the transitional period by up to […]. This request shall be accompanied
    by a report from the Monitoring Trustee, who shall, at the same time send a non-confidential
    copy of the report to the Notifying Party.
30. Strict firewall procedures (e.g. IT segregation) will be adopted so as to ensure that any
    competitively sensitive information relating to, or arising from such abovementioned
    arrangements will not be shared with, or passed on to, anyone outside of the Divestment
    Business’ operations, beyond what is reasonably required for the compliance with the
    obligations relating to the SSAs and/or TSAs.
Section C.        Related commitments
       Preservation of viability, marketability and competitiveness
31. From the Effective Date until Closing, the Notifying Party shall preserve or procure the
    preservation of the economic viability, marketability and competitiveness of the Divestment
    Businesses, in accordance with good business practice, and shall minimise as far as possible
    any risk of loss of competitive potential of the Divestment Businesses. In particular, the
    Notifying Party undertakes:
       (a)       not to carry out any action that might have a significant adverse impact on the
                 value, management or competitiveness of the Divestment Businesses or that might
                 alter the nature and scope of activity, or the industrial or commercial strategy or
                 the investment policy of the Divestment Businesses;
       (b)       to make available, or procure to make available, sufficient resources for the
                 development of the Divestment Businesses, on the basis and continuation of the
                 existing business plans;
       (c)       to take all reasonable steps, or procure that all reasonable steps are being taken,
                 including appropriate incentive schemes (based on industry practice), to
                 encourage all Key Personnel to remain with the Divestment Businesses, and not to
                 solicit or move any Personnel to their remaining business. Where, nevertheless,
                 individual members of the Key Personnel exceptionally leave the Divestment
                 Businesses, the Notifying Party shall provide a reasoned proposal to replace the
                 person or persons concerned to the Commission and the Monitoring Trustee. The
                 Notifying Party must be able to demonstrate to the Commission that the
                 replacement is well suited to carry out the functions exercised by those individual
                                                      9
 ---pagebreak---                   members of the Key Personnel. The replacement shall take place under the
                  supervision of the Monitoring Trustee, who shall report to the Commission.
       Hold-separate obligations
32. The Notifying Party commits, from the Effective Date until Closing, to procure that the
    Divestment Businesses are kept separate from the businesses it will be retaining, and to ensure
    that unless explicitly permitted under these Commitments and the relevant agreements
    required to ensure the viable transfer of the businesses (i.e. SSAs and TSAs), such as for
    instance some of the Divested Businesses’ continued reliance on the Notifying Party’s support
    for sales and quotations: (i) management and staff of the businesses retained by the Notifying
    Party have no involvement in the Divestment Businesses; (ii) the Key Personnel and
    Personnel of the Divestment Businesses have no involvement in any business retained by the
    Notifying Party and do not report to any individual outside the Divestment Businesses to the
    extent reasonably practicable and in any case do not report to any individual having
    involvement in competing retained businesses. In addition, the Notifying Party commits to
    take all necessary steps to ensure that its personnel involved in the transfer of the Divestment
    Businesses do not use any Confidential Information from the Purchaser other than information
    strictly required to assist in the transfer of the Divestment Businesses concerned, and that they
    only disclose such information to other of their personnel to the extent strictly required to
    assist in the transfer of the Divestment Businesses concerned.
33. Until Closing, the Notifying Party shall assist the Monitoring Trustee in ensuring that the
    Divestment Businesses are managed as distinct and saleable entities separate from the
    businesses which the Notifying Party is retaining. Immediately after the adoption of the
    Decision, the Notifying Party, upon consultation with the Commission and the Monitoring
    Trustee, shall appoint one Hold Separate Manager per divested business. The Hold Separate
    Managers, who shall be part of the Key Personnel, shall manage the Divestment Businesses
    independently and in the best interest of each business with a view to ensuring continued
    economic viability, marketability and competitiveness as well as independence from the
    businesses retained by the Notifying Party. The Hold Separate Managers shall closely
    cooperate with and report to the Monitoring Trustee. Any replacement of Hold Separate
    Managers shall be subject to the procedure laid down in paragraph 31(c) of these
    Commitments. The Commission may, after having heard the Notifying Party, require the
    Notifying Party to replace a Hold Separate Manager.
       Ring-fencing
34. The Notifying Party shall, to the extent possible and subject to transitional arrangements put
    in place to assist in the transfer of the Divested Businesses, implement, or procure to
    implement, all necessary measures to ensure that they do not, from the Effective Date, obtain
    any Confidential Information relating to the Divestment Businesses and that any such
    Confidential Information obtained before the Effective Date will be eliminated and not be
    used by them. In particular, the participation of the Divestment Businesses in any central
    information technology network shall be severed to the extent possible, without compromising
    the viability of the Divestment Businesses. The Notifying Party may obtain or keep
    information relating to the Divestment Businesses which is reasonably necessary for the
    divestiture of the Divestment Businesses or the disclosure of which to the Notifying Party is
    required by law.
                                                       10
 ---pagebreak---        Non-solicitation clause
35. The Notifying Party undertakes, subject to customary limitations, not to solicit, and to procure
    that Affiliated Undertakings do not solicit, the Key Personnel transferred with the Divestment
    Businesses for a period of […].
       Due diligence
36. If Sartorius is not the Purchaser and in order to enable potential alternate purchasers to carry
    out a reasonable due diligence of the Divestment Businesses, the Notifying Party shall, subject
    to customary confidentiality assurances and dependent on the stage of the divestiture process:
       (a)       provide to potential purchasers sufficient information as regards the Divestment
                 Businesses;
       (b)       provide to potential purchasers sufficient information relating to the Personnel and
                 allow them reasonable access to the Personnel.
Section D.        The Purchaser
37. In order to be approved by the Commission, the Purchaser must fulfil the following criteria:
       (a)       the Purchaser shall be independent of and unconnected to the Parties and their
                 Affiliated Undertakings (this being assessed having regard to the situation
                 following the divestiture).
       (b)       the Purchaser shall have the financial resources, proven expertise and incentive to
                 maintain and develop the Divestment Businesses as a viable and active competitive
                 force in competition with the Notifying Party and other competitors. In particular,
                 the Purchaser
                   (i) with regard to all Divestment Businesses must have proven expertise in the
                   biotechnology process equipment and/or consumables industry,
                   (ii) with regard to all Divestment Businesses must have an established presence
                   in at least one EU Member State other than the United Kingdom,
                   (iii) with regard to all Divestment Businesses must have at its disposal back-
                   office support functions, such as information technology (“IT”) staff, IT
                   operations, general back-office software (e.g., an enterprise resource planning
                   system and payroll system), HR functions, finance, accounting, tax, and legal
                   and compliance support, and
                   (iv) with regard to the SoloHill microcarriers and PVS business pursuant to
                   Schedule 2, the Chromatography resins business pursuant to Schedule 3, the
                   Chromatography hardware business pursuant to Schedule 4 and the SUT TFF
                   and SS HF TFF systems businesses pursuant to Schedule 5 must have at its
                   disposal a salesforce with experience of selling and promoting biotechnology
                   process equipment and/or consumables in EMEA, the Americas and Asia,
                   including China.
       (c)       the acquisition of the Divestment Businesses by the Purchaser must neither be
                 likely to create, in light of the information available to the Commission, prima facie
                 competition concerns nor give rise to a risk that the implementation of the
                 Commitments will be delayed. In particular, the Purchaser must reasonably be
                                                        11
 ---pagebreak---                  expected to obtain all necessary approvals from the relevant regulatory authorities
                 for the acquisition of the Divestment Businesses.
38. The final binding sale and Purchase Agreement (as well as ancillary agreements) relating to
    the divestment of the Divestment Business shall be conditional on the Commission’s
    approval. When the Notifying Party has reached an agreement with Sartorius or an alternate
    Purchaser, it shall submit a fully documented and reasoned proposal, including a copy of the
    final agreement(s), within two weeks to the Commission and the Monitoring Trustee. The
    Notifying Party must be able to demonstrate that the Purchaser fulfils the Purchaser Criteria
    and that the Divestment Businesses are being sold in a manner consistent with the
    Commission’s Decision and the Commitments. For the approval, the Commission shall verify
    that the purchaser fulfils the Purchaser Criteria and that the Divestment Business is being sold
    in a manner consistent with the Commitments including their objective to bring about a lasting
    structural change in the market. The Commission may approve the sale of the Divestment
    Businesses without one or more Assets or parts of the Personnel, or by substituting one or
    more Assets or parts of the Personnel with one or more different assets or different personnel,
    if this does not affect the viability and competitiveness of the Divestment Businesses after the
    sale, taking account of the proposed Purchaser.
Section E.        Trustee
        I.        Appointment procedure
39. The Notifying Party shall appoint a Monitoring Trustee to carry out the functions specified in
    these Commitments for a Monitoring Trustee. The Notifying Party commits not to close the
    Concentration before the appointment of a Monitoring Trustee.
40. If the Notifying Party has not entered into a binding sale and purchase agreement regarding the
    Divestment Business one month before the end of the First Divestiture Period or if the
    Commission has rejected a purchaser proposed by the Notifying Party at that time or thereafter,
    the Notifying Party shall appoint a Divestiture Trustee. The appointment of the Divestiture
    Trustee shall take effect upon the commencement of the Trustee Divestiture Period.
41. The Trustee shall:
        (a)      at the time of appointment, be independent of the Parties and their Affiliated
                 Undertakings;
        (b)      possess the necessary qualifications to carry out its mandate, for example have
                 sufficient relevant experience as an investment banker or consultant or auditor;
                 and
        (c)      neither have nor become exposed to a Conflict of Interest.
42. The Trustee shall be remunerated by the Notifying Party in a way that does not impede the
    independent and effective fulfilment of its mandate. In particular, where the remuneration
    package of a Divestiture Trustee includes a success premium linked to the final sale value of
    the Divestment Business, such success premium may only be earned if the divestiture takes
    place within the Trustee Divestiture Period.
                  Proposal by the Notifying Party
43. No later than two days after the Effective Date, the Notifying Party shall submit the name or
    names of one or more natural or legal persons whom the Notifying Party proposes to appoint
    as the Monitoring Trustee to the Commission for approval. No later than one month before the
    end of the First Divestiture Period or on request by the Commission, the Notifying Party shall
    submit a list of one or more persons whom the Notifying Party proposes to appoint as
                                                     12
 ---pagebreak---     Divestiture Trustee to the Commission for approval. The proposal shall contain sufficient
    information for the Commission to verify that the person or persons proposed as Trustee fulfil
    the requirements set out in paragraph 40 and shall include:
        (a)       the full terms of the proposed mandate, which shall include all provisions necessary
                  to enable the Trustee to fulfil its duties under these Commitments;
        (b)       the outline of a work plan which describes how the Trustee intends to carry out its
                  assigned tasks;
        (c)       an indication whether the proposed Trustee is to act as both Monitoring Trustee and
                  Divestiture Trustee or whether different trustees are proposed for the two functions.
                   Approval or rejection by the Commission
44. The Commission shall have the discretion to approve or reject the proposed Trustee(s) and to
    approve the proposed mandate subject to any modifications it deems necessary for the Trustee
    to fulfil its obligations. If only one name is approved, the Notifying Party shall appoint or
    cause to be appointed the person or persons concerned as Trustee, in accordance with the
    mandate approved by the Commission. The Trustee shall be appointed within one week of the
    Commission’s approval, in accordance with the mandate approved by the Commission.
                   New proposal by the Notifying Party
45. If all the proposed Trustees are rejected, the Notifying Party shall submit the names of at least
    two more natural or legal persons within one week of being informed of the rejection, in
    accordance with paragraphs 39 and 43 of these Commitments.
                   Trustee nominated by the Commission
46. If all further proposed Trustees are rejected by the Commission, the Commission shall
    nominate a Trustee, whom the Notifying Party shall appoint, or cause to be appointed, in
    accordance with a trustee mandate approved by the Commission.
        II.        Functions of the Trustee
47. The Trustee shall assume its specified duties and obligations in order to ensure compliance
    with the Commitments. The Commission may, on its own initiative or at the request of the
    Trustee or Notifying Party, give any orders or instructions to the Trustee in order to ensure
    compliance with the conditions and obligations attached to the Decision.
                   Duties and obligations of the Monitoring Trustee
48. The Monitoring Trustee shall:
    (i)       propose in its first report to the Commission a detailed work plan describing how it
              intends to monitor compliance with the obligations and conditions attached to the
              Decision.
    (ii)      oversee, in close co-operation with the Hold Separate Manager(s), the on-going
              management of the Divestment Businesses with a view to ensuring its continued
              economic viability, marketability and competitiveness and monitor compliance by the
              Notifying Party with the conditions and obligations attached to the Decision. To that
              end the Monitoring Trustee shall:
                (a) monitor the preservation of the economic viability, marketability and
                      competitiveness of the Divestment Businesses, and the keeping separate of the
                                                        13
 ---pagebreak---                 Divestment Businesses from the business retained by the Notifying Party, in
                accordance with paragraphs 31 and 32 of these Commitments;
          (b) supervise the management of the Divestment Businesses as a distinct and
                saleable entity, in accordance with paragraph 33 of these Commitments;
          (c) with respect to Confidential Information:
                  −   determine all necessary measures to ensure that the Notifying Party does
                      not after the Effective Date obtain any Confidential Information relating
                      to the Divestment Businesses,
                  −   in particular strive for the severing of the Divestment Businesses’
                      participation in a central information technology network to the extent
                      possible, without compromising the viability of the Divestment
                      Businesses and taking into account what is reasonably necessary to
                      implement the TSAs and SSAs concluded with the Purchaser,
                  −   make sure that any Confidential Information relating to the Divestment
                      Businesses obtained by the Notifying Party before the Effective Date is
                      eliminated and will not be used by the Notifying Party, and
                  −   decide whether such information may be disclosed to or kept by the
                      Notifying Party as the disclosure is reasonably necessary to allow the
                      Notifying Party to carry out the divestiture or as the disclosure is
                      required by law;
      (d) monitor the splitting of assets and the allocation of Personnel between the
           Divestment Businesses and the Notifying Party or Affiliated Undertakings;
(iii)   propose to the Notifying Party such measures as the Monitoring Trustee considers
        necessary to ensure the Notifying Party’s compliance with the conditions and
        obligations attached to the Decision, in particular the maintenance of the full
        economic viability, marketability or competitiveness of the Divestment Businesses,
        the holding separate of the Divestment Businesses and the non- disclosure of
        competitively sensitive information;
(iv)    review and assess potential purchasers as well as the progress of the divestiture
        process and verify that, if Sartorius is not the Purchaser and dependent on the stage of
        the divestiture process:
          (a) potential purchasers receive sufficient and correct information relating to the
                Divestment Business and the Personnel in particular by reviewing, if available,
                the data room documentation, the information memorandum and the due
                diligence process, and
          (b) potential purchasers are granted reasonable access to the Personnel;
(v)     act as a contact point for any requests by third parties, in particular, if applicable,
        potential purchasers, in relation to the Commitments;
(vi)    provide to the Commission, sending the Notifying Party a non-confidential copy at
        the same time, a written report within 15 days after the end of every month that shall
        cover the operation and management of the Divestment Businesses as well as the
        splitting of assets and the allocation of Personnel so that the Commission can assess
        whether the business is held in a manner consistent with the Commitments and the
        progress of the divestiture process as well as potential purchasers;
                                                  14
 ---pagebreak---     (vii)    promptly report in writing to the Commission, sending the Notifying Party a non-
             confidential copy at the same time, if it concludes on reasonable grounds that the
             Notifying Party is failing to comply with these Commitments;
    (viii)   within one week after receipt of the documented proposal referred to in paragraph 38
             of these Commitments, submit to the Commission, sending the Notifying Party a non-
             confidential copy at the same time, a reasoned opinion as to the suitability and
             independence of the Purchaser and the viability of the Divestment Businesses after the
             Sale and as to whether the Divestment Businesses are sold in a manner consistent with
             the conditions and obligations attached to the Decision, in particular, if relevant,
             whether the Sale of the Divestment Business without one or more Assets or not all of
             the Personnel affects the viability of the Divestment Business after the sale, taking
             account of the Purchaser;
    (ix)     assume the other functions assigned to the Monitoring Trustee under the conditions
             and obligations attached to the Decision.
49. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the
    Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each other during
    and for the purpose of the preparation of the Trustee Divestiture Period in order to facilitate
    each other's tasks.
                  Duties and obligations of the Divestiture Trustee
50. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum price
    the Divestment Businesses to a Purchaser, provided that the Commission has approved both
    the Purchaser and the final binding sale and purchase agreement (and ancillary agreements) as
    in line with the Commission's Decision and the Commitments in accordance with
    paragraphs 37 and 39 of these Commitments. The Divestiture Trustee shall include in the sale
    and purchase agreement (as well as in any ancillary agreements) such terms and conditions as
    it considers appropriate for an expedient sale in the Trustee Divestiture Period. In particular,
    the Divestiture Trustee may include in the sale and purchase agreement such customary
    representations and warranties and indemnities as are reasonably required to effect the sale.
    The Divestiture Trustee shall protect the legitimate financial interests of the Notifying Party,
    subject to the Notifying Party’s unconditional obligation to divest at no minimum price in the
    Trustee Divestiture Period.
51. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the Divestiture
    Trustee shall provide the Commission with a comprehensive monthly report written in the
    English language on the progress of the divestiture process. Such reports shall be submitted
    within 15 days after the end of every month with a simultaneous copy to the Monitoring
    Trustee and a non-confidential copy to the Notifying Party.
       III.       Duties and obligations of the Parties
52. The Notifying Party shall provide and shall cause their advisors to provide the Trustee with all
    such co-operation, assistance and information as the Trustee may reasonably require to
    perform its tasks. The Trustee shall have, to the extent possible, full and complete access to
    any of the Notifying Party’s or the Divestment Businesses’ books, records, documents,
    management or other personnel, facilities, sites and technical information necessary for
    fulfilling its duties under the Commitments and the Notifying Party and the Divestment
    Businesses shall provide the Trustee upon request with copies of any document. The
    Notifying Party and the Divestment Businesses shall make available to the Trustee one or
    more offices on their premises and shall be available for meetings in order to provide the
    Trustee with all information necessary for the performance of its tasks.
                                                     15
 ---pagebreak--- 53. The Notifying Party shall provide the Monitoring Trustee with all managerial and
    administrative support that it may reasonably request on behalf of the management of the
    Divestment Businesses. This shall include all administrative support functions relating to the
    Divestment Businesses which are currently carried out at headquarters level.
54. The Notifying Party shall provide and shall cause its advisors to provide the Monitoring
    Trustee, on request, with the information submitted to potential purchasers, in particular give
    the Monitoring Trustee access to the data room documentation and all other information
    granted to potential purchasers in the due diligence procedure. The Notifying Party shall
    inform the Monitoring Trustee on possible purchasers, submit lists of potential purchasers at
    each stage of the selection process, including the offers made by potential purchasers at those
    stages, and keep the Monitoring Trustee informed of all developments in the divestiture
    process.
55. The Notifying Party shall grant or procure Affiliated Undertakings to grant comprehensive
    powers of attorney, duly executed, to the Divestiture Trustee to effect the sale (including
    ancillary agreements), the Closing and all actions and declarations which the Divestiture
    Trustee considers necessary or appropriate to achieve the sale and the Closing, including the
    appointment of advisors to assist with the sale process. Upon request of the Divestiture
    Trustee, the Notifying Party shall cause the documents required for effecting the sale and the
    Closing to be duly executed.
56. The Notifying Party shall indemnify the Trustee and its employees and agents (each an
    “Indemnified Party”) and hold each Indemnified Party harmless against, and hereby agrees
    that an Indemnified Party shall have no liability to the Notifying Party for, any liabilities
    arising out of the performance of the Trustee’s duties under the Commitments, except to the
    extent that such liabilities result from the wilful default, recklessness, gross negligence or bad
    faith of the Trustee, its employees, agents or advisors.
57. At the expense of the Notifying Party, the Trustee may appoint advisors (in particular for
    corporate finance or legal advice), subject to the Notifying Party’s approval (this approval not
    to be unreasonably withheld or delayed) if the Trustee considers the appointment of such
    advisors necessary or appropriate for the performance of its duties and obligations under the
    Mandate, provided that any fees and other expenses incurred by the Trustee are reasonable.
    Should the Notifying Party refuse to approve the advisors proposed by the Trustee the
    Commission may approve the appointment of such advisors instead, after having heard the
    Notifying Party. Only the Trustee shall be entitled to issue instructions to the advisors.
    Paragraph 54 of these Commitments shall apply mutatis mutandis. In the Trustee Divestiture
    Period, the Divestiture Trustee may use advisors who served the Notifying Party during the
    Divestiture Period if the Divestiture Trustee considers this in the best interest of an expedient
    sale.
58. The Notifying Party agrees that the Commission may share Confidential Information
    proprietary to the Notifying Party with the Trustee. The Trustee shall not disclose such
    information and the principles contained in Article 17 (1) and (2) of the Merger Regulation
    apply mutatis mutandis.
59. The Notifying Party agrees that the contact details of the Monitoring Trustee are published on
    the website of the Commission's Directorate-General for Competition and they shall inform
    interested third parties, in particular the Purchaser, of the identity and the tasks of the
    Monitoring Trustee.
                                                      16
 ---pagebreak--- 60. For a period of 10 years from the Effective Date the Commission may request all information
    from the Notifying Party that is reasonably necessary to monitor the effective implementation
    of these Commitments.
        IV.       Replacement, discharge and reappointment of the Trustee
61. If the Trustee ceases to perform its functions under the Commitments or for any other good
    cause, including the exposure of the Trustee to a Conflict of Interest:
       (a)       the Commission may, after hearing the Trustee and the Notifying Party, require the
                 Notifying Party to replace the Trustee; or
       (b)       the Notifying Party may, with the prior approval of the Commission, replace the
                 Trustee.
62. If the Trustee is removed according to paragraph 59 of these Commitments, the Trustee may
    be required to continue in its function until a new Trustee is in place to whom the Trustee has
    effected a full hand over of all relevant information. The new Trustee shall be appointed in
    accordance with the procedure referred to in paragraphs 39-45 of these Commitments.
63. Unless removed according to paragraph 59 of these Commitments, the Trustee shall cease to
    act as Trustee only after the Commission has discharged it from its duties after all the
    Commitments with which the Trustee has been entrusted have been implemented. However,
    the Commission may at any time require the reappointment of the Monitoring Trustee if it
    subsequently appears that the relevant remedies might not have been fully and properly
    implemented.
Section F.        The review clause
64. The Commission may extend the time periods foreseen in the Commitments in response to a
    request from the Notifying Party or, in appropriate cases, on its own initiative. Where the
    Notifying Party requests an extension of a time period, it shall submit a reasoned request to
    the Commission no later than one month before the expiry of that period, showing good cause.
    This request shall be accompanied by a report from the Monitoring Trustee, who shall, at the
    same time send a non-confidential copy of the report to the Notifying Party. Only in
    exceptional circumstances shall the Notifying Party be entitled to request an extension within
    the last month of any period.
65. The Commission may further, in response to a reasoned request from the Notifying Party
    showing good cause waive, modify or substitute, in exceptional circumstances, one or more of
    the undertakings in these Commitments. This request shall be accompanied by a report from
    the Monitoring Trustee, who shall, at the same time send a non-confidential copy of the report
    to the Notifying Party. The request shall not have the effect of suspending the application of
    the undertaking and, in particular, of suspending the expiry of any time period in which the
    undertaking has to be complied with.
Section G.        Entry into force
66. The Commitments shall take effect upon the date of adoption of the Decision.
         (signed)
         duly authorised for and on
         behalf of Danaher Corporation
                                                     17
 ---pagebreak---                           Schedule 1 - The FortéBio Divestment Business
1.      The FortéBio Divestment Business as operated to date is a stand-alone molecular
characterisation business unit, which comprises various assets [Danaher’s legal and organisational
structure] within Molecular Devices LLC (“MolDev”). MolDev is one of the eight operating
companies of Danaher’s Life Sciences platform. The relevant organisational chart for the FortéBio
Divestment Business is attached as Annex 1.
2.      In accordance with paragraph 7 of these Commitments, the FortéBio Divestment Business
includes, but is not limited to:
(a)     the legal entity […];
(b)     the following main tangible assets:
    -   furniture and fixtures […];
    -   equipment […];
    -   lab equipment […]; and
    -   other instruments and consumables currently used by the business: […].
(c)     the following main intangible assets:
    -   patent portfolio […];
    -   all trade secrets […];
    -   trademarks, […];
    -   [other intangibles assets].
[…].
More details on the FortéBio patents, patent applications, registered trademarks, common law
trademarks and other intellectual property rights are contained in Annex 2 on the FortéBio
Divestment Business Intellectual Property.
(d)           the following main licences, permits and authorisations:
    -   Danaher will undertake all required preparation work to ensure post-closing business
        continuity (notably, [certifications]). Danaher understands that the purchaser must merely
        change the name on [certifications], given that the entire processes, procedures and
        employees will transfer with the facilities in Fremont and Shanghai, thus the certification
        will remain intact. Danaher commits to allow the Purchaser to rely on Pall’s existing
        certification under a TSA until it obtains its own as stated in Annex 3 on Potential
        Services to be Provided to the Divestment Businesses.
(e)           the following main contracts, agreements, leases, commitments and understandings:
    -   Danaher commits to use its Best Efforts to obtain, if and to the extent necessary, the
        consent of third parties to transfer all FortéBio customer contracts, supplier agreements,
        and distributor agreements in their entirety, [Danaher’s business strategy].
    -   The main contracts are:
                 the leases for two primary facilities:
                       o   […];
                       o   […].
                                                         18
 ---pagebreak---                   [Danaher’s business relationships].
                  [Danaher’s business relationships].
    -    [Danaher’s supply sources]. The records of such suppliers and purchase orders will transfer
         to the Purchaser.
         For further details please see Annex 4 on the FortéBio Divestment Business Main
         Suppliers.
(f)            the following customer, credit and other records:
All available records of the FortéBio Divestment Business customers, credits and other records will
be transferred to the Purchaser. For further details on the main customers please see Annex 5 on
the FortéBio Divestment Business Main Customers.
(g)            the following Personnel:
[…]
(h)            the following Key Personnel:
[…]
(i)            the arrangements for the supply with the following products or services by Danaher or
Affiliated Undertakings for a transitional period after Closing:
Please see Annex 3 on Potential Services to be Provided to the Divestment Businesses, Annex 6
on Supply and Service Agreement and Annex 7 on Transitional Trademark License
Agreement.
3.             [Danaher’s intellectual property rights]. In any case Danaher will provide a licence to
the Purchaser to use [Danaher’s intellectual property rights] trademarks, alone and in such
combinations with other words, phrases and logos during the transition period, the main terms of
which are provided in Annex 7 on Transitional Trademark License Agreement.
4.             If there is any asset or personnel which is not be covered by paragraph 2 of this
Schedule but which is both used (exclusively or not) in the FortéBio Divestment Business and
necessary for the continued viability and competitiveness of the FortéBio Divestment Business, that
asset or an adequate substitute will be offered to the Purchaser.
                                                       19
 ---pagebreak---                  Schedule 2 - The Microcarriers and PVS Divestment Business
1.             The Microcarriers and PVS Divestment Business operated independently until its
acquisition by Pall in November 2013, roughly two years before Pall’s acquisition by Danaher. The
business is currently organised as a business unit within Pall. The Microcarriers and PVS
Divestment Business is housed in SoloHill Engineering, located at 4370 Varsity Drive Suite B, Ann
Arbor, Michigan 48108, USA. The relevant organisational chart for the Microcarriers and PVS
Divestment Business is attached as Annex 8.
2.             In accordance with paragraph 11 of these Commitments, the Microcarriers and PVS
Divestment Business includes, but is not limited to:
(a)            the following main tangible assets:
    -    office furniture;
    -    relevant microcarriers equipment […]
    -    relevant PVS equipment […].
(b)            the following main intangible assets:
    -    patents […];
    -    trade secrets […];
    -    trademarks, […]
    -    [intellectual property rights and timeframe]
    -    [other intangible assets].
More details on the Microcarriers and PVS Divestment Business patents and trademarks are
contained in Annex 9 on the Microcarriers and PVS Divestment Business Intellectual
Property.
(c)            the following main licences, permits and authorisations:
    -    […] certification will need to be re-established post-closing under the new purchaser.
         Danaher commits that all required preparation work will be done to ensure post-closing
         business continuity. [Certifications]. Danaher commits to allow the Purchaser to rely on
         Pall’s existing certification under a TSA until it obtains its own as stated in Annex 3 on
         Potential Services to be Provided to the Divestment Businesses.
There are no other licences, permits or authorisations.
(d)            the following main contracts, agreements, leases, commitments and understandings;
Danaher commits to use its Best Efforts to obtain, if and to the extent necessary, the consent of
third parties to transfer [Danaher’s business strategy]. For further details see Annex 10 on the
Microcarriers and PVS Divestment Business Main Suppliers. [Danaher’s business strategy].
For further details on the main customers please see Annex 11 on the Microcarriers and PVS
Divestment Business Main Customers.
(e)            the following customer, credit and other records:
All available records of the Microcarriers and PVS Divestment Business customers, credits and
other records will be transferred to the Purchaser.
                                                      20
 ---pagebreak--- (f)           the following Personnel:
The table below lists the employees assigned to the Microcarriers and PVS Divestment Business
and their respective functions:
                                                  […]
Upon a reasoned request by the Purchaser, […], Danaher commits to use its Best Efforts to transfer
[…] in […] North America, Europe and Asia, [marketing plans and sales strategy].
(g)           the following Key Personnel:
[Danaher’s personnel]
(h)           The arrangements for the supply with the following products or services by Danaher
or Affiliated Undertakings for a transitional period of […]:
Please see Annex 3 on Potential Services to be Provided to the Divestment Businesses, Annex 6
on Supply and Service Agreement and Annex 7 on Transitional Trademark License
Agreement.
3.            The Microcarriers and PVS Divestment Business shall not include the following:
(a)      [Danaher’s organisational structure]. The Purchaser shall provide these functions, subject to
certain services being provided on a transitional basis pursuant to Annex 3 on Potential Services
to be Provided to the Divestment Businesses).
(b)      [Danaher’s marketing plans and sales strategy]. Danaher commits to provide any necessary
training for the Purchaser’s sales force in conjunction with the transferring subject-matter experts
and relevant training materials to help them identify and pursue sales opportunities under a TSA
[timeframe].
(c)      [Danaher’s intellectual property rights and quantities produced and sold].
For the sake of completeness, the SoloHill facility also houses Process Development Services
(“PDS”). PDS provides targeted development and consultation services for development of
bioprocessing systems and processes as part of [Danaher’s organisations structure and the
Transaction]. Upon a reasoned request from the Purchaser, [timeframe and process], showing that
the remaining PDS employees currently working on the SoloHill site have skills necessary to the
microcarriers business, Danaher commits to use its Best Efforts to […]. [Parties sales strategy].
Other than the exclusion of PDS from the divestiture, there is no difference between the nature and
scope of the business as currently operated and the one to be divested.
4.            If there is any asset or personnel which is not be covered by paragraph 2 of this
Schedule but which is both used (exclusively or not) in the Microcarriers and PVS Divestment
Business and necessary for the continued viability and competitiveness of the Microcarriers and
PVS Divestment Business, that asset or an adequate substitute will be offered to the Purchasers.
                                                      21
 ---pagebreak---                  Schedule 3 - The Chromatography Resins Divestment Business
1.             The Chromatography Resins Divestment Business has been operating out of
[Danaher’s organisational structure] owned and operated by Pall at 48 Avenue des Genottes, 95800,
Cergy, France. The relevant organisational chart for the Chromatography Resins Divestment
Business is attached as Annex 12.
2.             In accordance with paragraph 17 of these Commitments, the Chromatography Resins
Divestment Business includes, but is not limited to:
(a)            the following main tangible assets:
    -    […] facility at Cergy […];
    -    all chromatography resins manufactured in Cergy as well as additional products and
         associated key inputs to manufacture those products; and
    -    machinery, office and laboratory equipment.
(b)            the following main intangible assets:
    -    […] patents [business know-how];
    -    trade secrets […]
    -    trademarks, […].
[Intellectual property rights].
More details on the Chromatography Resins Divestment Business patents, patent applications,
registered trademarks and trademark applications as well as common law trademarks are contained
in Annex 13 on the Chromatography Resins Divestment Business Intellectual Property.
(c)            the following main licences, permits and authorisations:
    -    Danaher will undertake all required preparation work to ensure post-closing business
         continuity (notably, [certifications]. Danaher commits to allow the Purchaser to rely on
         Pall’s existing certification under a TSA until it obtains its own as stated in Annex 3 on
         Potential Services to be Provided to the Divestment Businesses;
    -    [Certifications].
(d)            the following main contracts, agreements, leases, commitments and understandings;
    -    Danaher commits to use its Best Efforts to obtain, if and to the extent necessary, the consent
         of third parties to transfer all customer and supplier contracts and/or purchase orders to the
         Purchaser and to use its Best Efforts to ensure such consents are obtained for the main
         contracts before the Commission’s purchaser approval. Danaher does not anticipate any
         difficulty in obtaining these consents. [Danaher’s commitments and business strategy].
         Please see Annex 14 on the Chromatography Resins Divestment Business Main
         Suppliers for further details.
(e)            the following customer, credit and other records:
All available records of the Chromatography Resins Divestment Business customers, credits and
other records will be transferred to the Purchaser.
For further details on the main customers please see Annex 15 on the Chromatography Resins
Divestment Business Main Customers.
                                                       22
 ---pagebreak--- (f)            the following Personnel:
The table below lists the transferring employee census for the Chromatography Resins Divestment
Business:
                                                   […]
Upon a reasoned request by the Purchaser […], Danaher commits to use its Best Efforts to transfer
[…] in […] North America, Europe and Asia, [Parties’ marketing plans and sales strategy].
(g)            the following Key Personnel:
[Danaher’s personnel]
(h)            the arrangements for the supply with the following products or services by Danaher or
Affiliated Undertakings for a transitional period of […]:
Please see Annex 3 on Potential Services to be Provided to the Divestment Businesses, Annex 6
on Supply and Service Agreement, and Annex 7 on Transitional Trademark License
Agreement.
3.             The Chromatography Resins Divestment Businesses shall not include the following:
a)       [Danaher’s sales strategy]. Danaher commits to provide any necessary training for the
Purchaser’s sales force in conjunction with the transferring subject-matter experts and relevant
training materials to help them identify and pursue sales opportunities under a TSA [timeframe].
b)       [Supply source]. For this reason, Danaher will not transfer this supplier contract, [supply
source], and make introductions to [supply source] for the potential negotiation of a new supply
agreement with the purchaser, if the Purchaser so desires (see Annex 3 on Potential Services to be
Provided to the Divestment Businesses).
[Danaher’s organisational structure and production secrets].
4.       If there is any asset or personnel which is not be covered by paragraph 2 of this Schedule but
which is both used (exclusively or not) in the Chromatography Resins Divestment Business and
necessary for the continued viability and competitiveness of the Chromatography Resins Divestment
Business, that asset or adequate substitute will be offered to the Purchaser.
                                                       23
 ---pagebreak---                Schedule 4 - The Chromatography Hardware Divestment Business
1.             The Chromatography Hardware Divestment Business comprises conventional
chromatography columns, conventional and single-use technology chromatography skids and
BioSMB continuous chromatography process development (“PD”) and process scale skids. The
Chromatography Hardware Divestment Business is housed in Pall. The relevant organisational
charts for the Chromatography Hardware Divestment Business is attached as Annex 16.
2.             Danaher commits to carry out the divestiture of the Chromatography Hardware
Divestment Business [Danaher’s commitments]:
    -    Danaher commits to provide the Purchaser with a fully operational, competitively capable
         chromatography hardware business: [Danaher’s commitments and location of its facilities].
    -    Post-closing, [location and strategy].
3.             In accordance with paragraph 22 of these Commitments, the Chromatography
Hardware Divestment Business includes, but is not limited to:
(a)            the following main tangible assets:
    -    […].
(b)      the following main intangible assets:
    -    a patent portfolio [intellectual property rights];
    -    a patent portfolio [intellectual property rights];
    -    all trade secrets [business know-how and organisation];
    -    know-how [business know-how and organisation];
    -    any trade secrets [business know-how and organisation];
    -    [business know-how and organisation];
    -    all relevant software;
    -    [intellectual property rights];
    -    trade secrets and other IP.
Danaher commits […]. The main terms of this agreement are outlined in Annex 17 on the
Intellectual Property Licence Agreement.
More details on the Chromatography Hardware Divestment Business patents, patent applications,
registered trademarks and trademark applications are contained in Annex 18 on the
Chromatography Hardware Divestment Business Intellectual Property.
(c)            the following main licences, permits and authorisations:
    -    [certifications]; and
    -    […] certification for the existing facilities, which will need to be re-established post-
         closing under the Purchaser. Danaher commits to use Best Efforts to support the Purchaser
         in obtaining such […] certification. Similar to other transferring facilities, all required
         preparation work will be done to ensure post-closing business continuity. Danaher commits
         to allow the Purchaser to rely on Pall’s existing certifications under a TSA until it obtains
         its own as stated in Annex 3 on Potential Services to be Provided to the Divestment
         Businesses.
                                                        24
 ---pagebreak---     -    [Certifications]. Danaher understands that the extension process could take [timeframe] and
         may require an audit of the facility. Post-closing, the Purchaser would be able to use the
         Pall licence and operate under Pall’s quality system under a TSA, allowing it to produce
         and ship units from closing [timeframe and certification].
(d)           the following main contracts, agreements, leases, commitments and understandings:
    -    Danaher commits to use its Best Efforts to obtain, if and to the extent necessary, the
         consent of third parties to transfer [supply sources and business strategy];
    -    [supply sources and business strategy].
    -    [supply sources and business strategy]. Further details are contained in Annex 3 on
         Potential Services to be Provided to the Divestment Businesses.
    -    [business strategy]; and
    -    Danaher commits to facilitate establishment of direct commercial relationships between the
         supplier and the Purchaser [business strategy].
         Further details are contained in Annexes 19 and 20 on the Chromatography Hardware
         Divestment Business Main Suppliers and Main Customers.
(e)           the following customer, credit and other records:
All available records of the Chromatography Hardware Divestment Business customers, credits and
other records will be transferred to the Purchaser.
(f)           the following Personnel:
The list of transferring employees can be found in Annex 21 on the Chromatography Hardware
Divestment Business Personnel.
Upon a reasoned request by the Purchaser, […], Danaher commits to use its Best Efforts to transfer
[…] in […] North America, Europe and Asia, [information on the Transaction, the Parties’
marketing plans and sales strategy].
(g)           the following Key Personnel:
[…]
(h)           the arrangements for the supply with the following products or services by Danaher or
Affiliated Undertakings for a transitional period after Closing:
See Annex 3 on Potential Services to be Provided to the Divestment Businesses, Annex 6 on
Supply and Service Agreement, Annex 7 on Transitional Trademark License Agreement and
Annex 22 on Intellectual Property License Agreement for Business Secrets.
4.            The Chromatography Hardware Divestment Business does not exclude any areas
where the commitments offered differ from the nature and scope of the business as currently
operated. However, the Chromatography Hardware Divestment Business does not include certain
functions and/or accreditations which will be fulfilled by the purchaser:
(a)           For the entire business
      -       [marketing plans and sales strategy]. Danaher commits to provide any necessary
              training for the Purchaser’s sales force in conjunction with the transferring subject-
              matter experts and relevant training materials to help them identify and pursue sales
              opportunities under a TSA [timeframe];
      -       [organisational structure]; and
                                                        25
 ---pagebreak---     -       titles to its facilities, [organisational structure].
(b)         Specific to columns
    -       Danaher is aware of one accreditation that likely cannot be obtained pre-closing. It is
            [certifications]. Danaher will use its Best Efforts to support this process and will
            provide the purchaser with a data extract of its current QMS to ensure that the
            purchaser has the required documentation to schedule an audit. Danaher does not
            expect any issue in obtaining a new [certifications].
(c)         Specific to chromatography skids except BioSMB PD
    -       [Danaher’s commitments];
    -       The […] trademark, [intellectual property rights]. This trademark will be licensed to the
            Purchaser under a transitional agreement as required for the chromatography skids
            business. [Intellectual property rights].
(d)         Specific to BioSMB PD
    -       [Danaher’s commitments].
    -       The […] trademark, [intellectual property rights]. This trademark will be licensed to the
            Purchaser under a transitional agreement as required for the BioSMB PD business.
            [Intellectual property rights].
5.          If there is any asset or personnel which is not be covered by paragraph 2 of this
Schedule but which is both used (exclusively or not) in the Chromatography Hardware Divestment
Business and necessary for the continued viability and competitiveness of the Chromatography
Hardware Divestment Business, that asset or adequate substitute will be offered to the Purchaser.
                                                         26
 ---pagebreak---           Schedule 5 - The SUT TFF and SS HF TFF Systems Divestment Business
1.             The Pall Biotech SUT TFF and SS HF TFF systems business comprises Pall Biotech’s
Single-Use Tangential Flow Filtration (“SUT TFF”) systems and stainless-steel Hollow-Fibre TFF
(“SS HF TFF”) systems business (together the “SUT TFF and SS HF TFF Systems Divestment
Business”). The SUT TFF and SS HF TFF systems Divestment Business is housed in Pall. The
relevant organisational chart for the SUT TFF and SS HF TFF systems Divestment Business is
attached as Annex 22.
2.             Danaher commits to carry out the divestiture of the SUT TFF and SS HF TFF Systems
Divestment Business [Danaher’s commitments]:
    -    Danaher commits to provide the Purchaser with a fully operational SUT TFF and SS HF
         TFF systems business, preserving as much as possible the current business from a
         manufacturing, geographic and personnel organization of the business: [location and
         employees].
    -    Post-Closing, [location and strategy].
3.             In accordance with paragraph 26of these Commitments, the SUT TFF and SS HF TFF
systems Divestment Business includes, but is not limited to:
(a)            the following main tangible assets:
    -    Equipment used [tangible assets];
    -    […].
(b)      the following main intangible assets:
    -    know-how and trade secrets […];
    -    all relevant software;
    -    [intellectual property rights];
    -    the transitional rights to use […] trademarks, [intellectual property rights]. This right does
         not extend to any new TFF systems launched by the Purchaser post-Closing, nor to any
         new customer won by the Purchaser post-Closing; and
    -    [intellectual property rights].
[Intellectual property rights]. The main terms of this agreement are outlined in Annex 17 on the
Intellectual Property Licence Agreement.
(c)            the following main licences, permits and authorisations:
    -    Danaher will allow the purchaser to rely upon existing certifications such as manufacturing
         site registrations, product registrations, listings, licensing and/or labelling to market under a
         TSA.
    -    [Certifications] for the existing facilities will need to be re-established post-closing under
         the new purchaser. [Certifications]. Danaher commits to allow the Purchaser to rely on
         Pall’s existing certification under a TSA until it obtains its own as stated in Annex 23 on
         Potential Services to be Provided to the SUT TFF and SS HF TFF Divestment
         Businesses.
    -    The purchaser will need to comply with safety and environmental standards, although there
         is no notified body. The purchaser must issue a declaration of conformity with the
                                                          27
 ---pagebreak---          standards. Because these are common requirements, the purchaser should already meet
         these standards. [Standards].
    -    [Licenses].
(d)            the following main contracts, agreements, leases, commitments and understandings
    -    Danaher commits to use its Best Efforts to obtain, if and to the extent necessary, the
         consent of third parties to transfer SUT TFF and SS HF TFF systems supplier contracts and
         third-party patent licence agreements to the Purchaser;
    -    Danaher will transfer and assign all relevant software [supply sources, business relationships
         and business strategy];
    -    [Business strategy]
    -    Danaher commits to facilitate establishment of direct commercial relationships between the
         supplier and the Purchaser [business strategy].
         For further details please see Annexes 24 and 25 on SUT TFF and SS HF TFF systems
         Main Customers and Suppliers.
(e)            the following customer, credit and other records:
All available records of the SUT TFF and SS HF TFF systems Divestment Business customers,
credits and other records will be transferred to the Purchaser.
(f)            the following Personnel:
The list of transferring employees can be found in Annex 26 on SUT TFF and SS HF TFF systems
Divestment Business’ Personnel.
Upon a reasoned request from the Purchaser, […], Danaher commits to use its Best Efforts to
transfer to the Purchaser […] in […], as the case may be.
Upon a reasoned request by the Purchaser, […], Danaher commits to use its Best Efforts to transfer
[…] in […] North America, Europe and Asia, [information on the Transaction, Danaher’s marketing
plans and sales strategy].
(g)            the following Key Personnel:
[…]
(h)            the arrangements for the supply with the following products or services by Danaher or
Affiliated Undertakings for a transitional period of […]:
Please see Annex 23 on Potential Services to be Provided to the SUT TFF and SS HF TFF
Divestment Businesses, Annex 6 on Supply and Service Agreement, Annex 7 on Transitional
Trademark License Agreement and Annex 17 on Intellectual Property License Agreement.
4.             The SUT TFF and SS HF TFF systems Divestment Business does not exclude any
areas where the commitments offered differs from the nature and scope of the business as currently
operated. However, the SUT TFF and SS HF TFF systems Divestment Business does not include
certain functions and/or accreditations which will be fulfilled by the purchaser:
[Information on the Transaction, Danaher’s marketing plans and sales strategy]. Danaher commits
to provide any necessary training for the Purchaser’s sales force and after sales service in
conjunction with the transferring subject-matter experts and relevant training materials to help them
identify and pursue sales opportunities under a TSA for [timeframe].
                                                       28
 ---pagebreak--- [Danaher’s commitments].
For the sake of completeness, the custom-designed conventional flat sheet (“FS”) TFF systems are
not included in the divestiture for several reasons. First, Danaher understands that the Commission
does not have serious doubts as to the effects of the transaction on conventional FS TFF systems;
accordingly, there is no substantive justification for including these activities in the scope of the
proposed remedy. Second, [business structure].
5.           If there is any asset or personnel which is not be covered by paragraph 2 of this
Schedule but which is both used (exclusively or not) in the SUT TFF and SS HF TFF systems
Divestment Business and necessary for the continued viability and competitiveness of the
Chromatography Hardware Divestment Business, that asset or adequate substitute will be offered to
the Purchaser.
                                                      29
 ---pagebreak---             Annex 1 on the FortéBio Divestment Business Organisational Chart
                                                 […]
             Annex 2 on the FortéBio Divestment Business Intellectual Property
                                                 […]
        Annex 3 on Potential Services to be Provided to the Divestment Businesses
For the avoidance of doubt, Danaher commits to transitional service agreements as specified above
in the main body of the Commitments for a duration of […], extendable, upon a reasoned request
from the Purchaser showing good cause and approval by the Commission, for an additional […], and
on terms and conditions equivalent to those at present afforded to the business or at cost, of all
current arrangements under which the Notifying Party or its Affiliated Undertakings supply products
or services to the Divestment Businesses, as detailed in Schedules and relevant Annexes. The
Duration column in the table below lists an indicative time period at the end of which Danaher would
anticipate that the Purchaser would no longer require the corresponding services.
                                                 […]
                Annex 4 on the FortéBio Divestment Business Main Suppliers
                                                 […]
               Annex 5 on the FortéBio Divestment Business Main Customers
                                                 […]
                          Annex 6 on Supply and Services Agreement
                                                 […]
                   Annex 7 on Transitional Trademark License Agreement
                                                 […]
   Annex 8 on the Microcarriers and PVS Divestment Business Organisational Chart
                                                 […]
    Annex 9 on the Microcarriers and PVS Divestment Business Intellectual Property
                                                 […]
      Annex 10 on the Microcarriers and PVS Divestment Business Main Suppliers
                                                 […]
     Annex 11 on the Microcarriers and PVS Divestment Business Main Customers
                                                 […]
  Annex 12 on the Chromatography Resins Divestment Business Organisational Chart
                                                 […]
  Annex 13 on the Chromatography Resins Divestment Business Intellectual Property
                                                 […]
     Annex 14 on the Chromatography Resins Divestment Business Main Suppliers
                                                 […]
                                                     30
 ---pagebreak---      Annex 15 on the Chromatography Resins Divestment Business Main Customers
                                                 […]
   Annex 16 on the Chromatography Hardware Divestment Business Organisational
                                               Chart
                                                 […]
                  Annex 17 on the Intellectual Property Licence Agreement
                                                 […]
      Annex 18 on the Chromatography Hardware Divestment Business Intellectual
                                              Property
                                                 […]
   Annex 19 on the Chromatography Hardware Divestment Business Main Suppliers
                                                 […]
  Annex 20 on the Chromatography Hardware Divestment Business Main Customers
                                                 […]
      Annex 21 on the Chromatography Hardware Divestment Business Personnel
                                                 […]
         Annex 22 on the SUT TFF and SS HF TFF Systems Divestment Business
                                    Organisational Structure
                                                 […]
     Annex 23 on Potential Services to be Provided to the SUT TFF and SS HF TFF
                                 Systems Divestment Businesses
For the avoidance of doubt, Danaher commits to transitional service agreements as specified above
in the main body of the Commitments for a duration of […], extendable upon a reasoned request
from the Purchaser showing good cause and approval by the Commission for an additional […], and
on terms and conditions equivalent to those at present afforded to the business or at cost, of all
current arrangements under which the Notifying Party or its Affiliated Undertakings supply products
or services to the Divestment Businesses, as detailed in Schedules and relevant Annexes. The
Duration column in the table below lists an indicative time period at the end of which Danaher would
anticipate that the Purchaser would no longer require the corresponding services.
                                                 […]
               Annex 24 on SUT TFF and SS HF TFF systems Main Suppliers
                                                 […]
              Annex 25 on SUT TFF and SS HF TFF systems Main Customers
                                                 […]
     Annex 26 on SUT TFF and SS HF TFF systems Divestment Business Personnel
                                                 […]
                                                     31