CELEX: 32014M7309
Language: en
Date: 2014-08-04 00:00:00
Title: Commission Decision of 04/08/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7309 - BRIDGEPOINT / EdRCP) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

                                        Brussels, 4.8.2014
                                        C(2014) 5692 final

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|To the notifying party:                                                |                                                                       |

Dear Sir/Madam,

Subject:    Case M.7309 – BRIDGEPOINT / EdRCP
         Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

    1) On 27 June 2014, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger  Regulation
       by which the undertaking Bridgepoint Advisers Group Limited ("Bridgepoint" UK), hereinafter the "Notifying  Party",  acquires  within  the
       meaning of Article 3(1)(b) of the Merger Regulation control of the whole of Edmond de Rothschild Capital Partners ("EdRCP" France) by  way
       of purchase of shares[2]. Bridgepoint and EdRCP are collectively referred to as the "Parties".

       THE PARTIES

    2) Bridgepoint is a private equity fund controlling a number of entities active in a wide range of industry sectors  across  the  EEA,  among
       others financial services, media and healthcare (including the provision of ophthalmic and dental surgical services in hospitals).

    3) EdRCP is a private equity fund holding interests in a number of portfolio companies, active in a wide range of sectors across the EEA  and
       in particular packaging and healthcare  products  (including  the  supply  of  ophthalmic  surgical  products,  dental  equipment,  dental
       consumables, dental imaging products and medical devices). At present it is one of the Edmond de Rothschild Group's private equity arms.

       THE OPERATION AND THE CONCENTRATION

    4) The transaction consists of the acquisition of sole control over EdRCP by Bridgepoint, by way of purchase of shares via a  Share  Purchase
       Agreement ("SPA") signed on 27 May 2014.

    5) Therefore, the transaction constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

    6) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[3] (Bridgepoint […] million; EdRCP
       […] million). Each of them has an EU-wide turnover in excess of EUR 250 million (Bridgepoint […] million; EdRCP […] million), but they  do
       not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State.

    7) Therefore, the notified operation has an EU dimension within the meaning of Article 1(2) of Merger Regulation.

       ASSESSMENT

    8) EdRCP, through one of its portfolio companies, Moria, is active in the market for supply of ophthalmic surgical products such as hand-held
       instrumentation and equipment for refractive and corneal transplant surgeries in the EEA.  In  addition,  through  its  portfolio  company
       Acteon, EdRCP is active in the supply of dental equipment, dental consumables, dental imaging products and medical devices (endoscopes) in
       the EEA.

    9) Bridgepoint, through its portfolio companies Medipole, C2S and Médi-Partenaires is active  in  the  provision  of  ophthalmic  and  dental
       surgical hospital services in France.

   10) While the notified transaction does not result in any horizontal overlaps, it gives rise to the two following vertical overlaps:

(i) the market for the supply of ophthalmic surgical products on the upstream side and the  market  for  the  provision  of  ophthalmic  surgical
       hospital services on the downstream side and

(ii) the market for the supply of dental equipment, dental consumables, dental imaging  products  and  medical  devices  (capital  equipment  and
       endoscope) on the upstream side and the market for the provision of dental surgical hospital services on the downstream side.

1 MARKET DEFINITION

1 Supply of ophthalmic surgical products

1 Relevant product market

   11) The Commission has assessed the ophthalmic surgical products in a recent  decision[4]   where  it  left  open  the  question  whether  all
       ophthalmic surgical devices, solutions and instruments constitute a single product market.  If  the  Commission  takes  into  account  the
       narrower segements referred to in that case (i.e. ophthalmic medical devices, viscoelastic solutions, vitreo-retinal products, disposables
       and intraocular lenses), Moria is only active in one of the five segments identified, namely the ophthalmic medical devices sub-segment.

   12) In any event, the Commission considers that the exact product market definition can be left open for the purpose of the case at  hand,  as
       competition concerns are unlikely to arise under any plausible market definition.

2 Relevant geographic market

   13) In a previous decision concerning surgical products, the Commission considered that the market for surgical products is  EEA-wide[5].  The
       Commission noted that surgical products are regulated by European standards, that price levels are similar across the EEA and  that  there
       are no significant barriers to trade in surgical products within the EEA. However, in a more recent case[6] concerning ophthalmic surgical
       products, the Commission analysed the effects of the transaction both at EEA and national level.

   14) In any event, the Commission considers that the exact geographic market definition can be left open for the purpose of the case  at  hand,
       as competition concerns are unlikely to arise under any plausible market definition.

2 Supply of dental equipment, dental consumables, dental imaging products and medical devices (capital equipment and endoscope)

1 Relevant product market

   15) The Commission has so far not assessed these markets and therefore the question whether the market  should  be  segmented.  The  Notifying
       Party considers that each of these segments above may constitute a relevant market for the purpose of the competitive assessment, although
       most of the competitors are active in most if not all these segments.

1 Market for the supply of small dental equipment

   16) Based on Acteon's product range, this market would cover the supply of ultrasound used for orthodontics, implants,  tartar  removal,  mini
       leds used for orthodontics, esthetic dental care, dentures, polishers and preventive tartar removal, sterilizers, bistouries,  micromotors
       and accessories. To the exception of bistouries, which are universally used, all products are aimed for common day-to-day dental care  and
       are sold directly to dentists who are not in clinics or hospitals.

2 Market for the supply of dental consumables

   17) Based on Acteon's product range, this market would cover the supply of anesthetics, antiseptics,  sedatives,  hemostatic,  dental  prints,
       aesthetic reconstruction (adhesives), whitening products and hygiene products.  To  the  exception  of  anesthetics  which  are  generally
       purchased by clinics and hospitals from large market players, all products are aimed for  common  day-to-day  dental  care  and  are  sold
       directly to dentists who are not in clinics or hospitals.

3 Market for the supply of dental imagery devices

   18) Based on Acteon's product range, this market would cover the supply of intra-oral  cameras,  notably  through  "SoproLife"  and  radiology
       products (sensors "Sopix", panoramic scanners 'PsPix"). These products are aimed for common day-to-day dental care and are  sold  directly
       to dentists who are not in clinics or hospitals.

4 Market for medical devices (endoscopes and capital         equipment)

   19) Endoscopes are universally used notably for dental care and dental surgical acts. The Parties consider that a distinction should  be  made
       between flexible endoscopes, which are not commercialized by Acteon, and rigid endoscopes, which are commercialized by Acteon.

   20) The Commission considers that exact product market definitions of the above products can be left open for the purpose of the case at hand,
       as competition concerns are unlikely to arise under any plausible market definition.

2 Relevant geographic market

   21) While there are no past decisions assessing these markets , the Notifying Party considers that the markets for  dental  equipment,  dental
       consumables and dental imaging products are at least EEA-wide.

   22) For the purpose of the present case, the assessment of the Transaction will be carried out on the  markets  of  dental  equipment,  dental
       consumables, dental imaging products, medical devices (endoscope) in the EEA and  France  (the  only  country  where  vertically  affected
       markets arise).

   23) In any event, the Commission considers that the exact geographic market dimension can be left open for the purpose of the case at hand, as
       competition concerns are unlikely to arise under any plausible market definition.

3 Provision of ophthalmic and dental surgical hospital services

1 Relevant product market

   24) The Commission has assessed the market for hospital services on a number of occasions[7]. In its previous decisions,  the  Commission  has
       indicated a possible distinction between private hospital services and publicly funded hospitals[8] but found such distinction may not  be
       warranted where the reimbursement of health care is provided  irrespective  of  that  consideration.  Moreover,  the  Commission  has  not
       concluded on the need to further segment the market according to  the  "group  of  specialties",  namely  medicine,  surgery,  obstetrics,
       gynaecology etc.[9]

   25) In any event, the Commission considers that the exact product market definition can be left open for the purpose of the case at  hand,  as
       competition concerns are unlikely to arise under any plausible market definition considered.

2 Relevant geographic market

   26) In previous decisions, the Commission considered that the market for hospital services was not broader than national in  scope,  but  left
       the precise geographic scope of this market open[10]. In other cases,[11] the Commission noted that the relevant market could be  narrower
       than national, but did not conclude on the exact geographic scope of the hospital services market[12].

   27) For the purpose of the present case, the assessment of the Transaction will be carried out on the hospital services market in France  (the
       only country where vertically affected markets arise, at the level of the group of specialties and at the level  of  major  categories  of
       diagnostics, at a national level and a subnational level (department and region).

   28) In any event, the Commission considers that the exact geographic market definition can be left open for the purpose of the case  at  hand,
       as competition concerns are unlikely to arise under any plausible market definition considered.

2 COMPETITIVE ASSESSMENT

   29) On the downstream markets for provision of hospital  services,  Bridgepoint's  market  shares  exceed  [30-40]%  in  a  number  of  French
       departments.

   30) More precisely, Bridgepoint's market shares[13] in the downstream markets, on the basis of the narrowest  possible  geographic  definition
       (i.e. French départment) are the following:

    a. On the overall market for the provision of surgical hospital services, Bridgepoint has [40-50]% market share in Deux-Sevres,  [60-70]%  in
       Aude and [50-60]% in Pyrenees Orientales;

    b. On the market for the provision of ophthalmic surgical hospital services, Bridgepoint has [40-50]% market  share  in  Loire,  [30-40]%  in
       Moselle, [30-40]% in Var, [90-100]% in Aude, [50-60]% in Pyrenees Orientales, [30-40]% in Dordogne;

    c. On the market for the provision of dental surgical hospital services, Bridgepoint has [30-40]% market share in Loire,  [30-40]%  in  Tarn,
       [30-40]% in Var, [40-50]% in Deux-Sevres, [80-90]% in Aude, [50-60]% in Pyrenees Orientales.

   31) However, in the upstream markets namely the supply of ophthalmic medical devices and  supply  of  dental  equipment,  dental  consumables,
       dental imaging products and medical devices at French and EEA level, EdRCP's market shares are below [0-5]% and [0-5]% respectively.

   32) The Notifying Party puts forward a number of arguments to substantiate the lack  of  any  vertical  effects  stemming  from  the  proposed
       transaction:

    a. In both of the upstream markets, EdRCP is clearly a de minimis player and other strong  competitors  such  as  Novartis  (Alcon),  Valeant
       (Bauch & Lomb Storz) and Abbott (AMO) – in the supply of ophthalmic medical devices – and 3M, Densply, Danaher, Planmeca,  Sirona,  Storz,
       Olympus and Wolf – in markets of supply of dental equipment, dental consumables, dental imaging products and medical devices – are present
       at national and EEA levels. All these competitors have larger market shares than EdRCP, varying between 10% and 50%, both in France and in
       the EEA;

    b. The high market shares on the downstream market may be due to the fact that there is a limited number  of  hospitals  in  the  departments
       where the market shares are high (Aude);

    c. At a wider regional and national level, Bridgepoint's market shares never exceed [20-30]%;

    d. The ophthalmic technology developed by Moria, […];

    e. The prescribers (purchasing advisors) are the practitioners in consideration of their needs, their  technical  requirements  and  not  the
       clinics themselves; and

    f. Bridgepoint's clinics are members of a central procurement entity for public and private hospitals (CAHPP) which manages the  purchase  of
       surgical products and referencing of suppliers at national level in consideration of the needs expressed by the practitioners.

   33) Taking into account all the above, the Notifynig Party considers any foreclosure theory implausible.

Commission's assessment

   34) Indeed, the very low market shares of the Parties on the upstream markets and the fact that competitors on  these  markets  are  companies
       active at least at the EEA-wide level would make that any attempt to foreclose input would be largely  defeated,  the  Parties'  customers
       would have ample opportunities to turn to the Parties' competitors.

   35) Similarly, any attempt of customer foreclosure would fail, since despite the high market shares  appearing  at  departemental  level,  the
       actual footprint of the Parties at regional, or national level is limited. Moreover, the fact that Bridgepoint's  clinics  have  delegated
       the procurement and their purchasing decisions to a central procurement entity (CAHPP) indicates that  their  bargaining  power  vis-à-vis
       their suppliers may be limited. Last, the Parties' competitors are active at the national/EEA-wide level and therefore even if  they  were
       to be forclosed from a customer base in a specific department, they would continue to have sufficient customer base at both  national  and
       EEA-wide level.

   36) Moreover, the Commission notes that the replies to its market investigation did not reveal any vertical foreclosure concerns, neither from
       Parties' competitors in the upstream markets, nor from their customers.

   37) Based on the foregoing and on all the available evidence, the Commission considers that the Transaction does not raise serious  doubts  as
       to its compatibility with the internal market and with the EEA Agreement.

       CONCLUSION

   38) For the above reasons, the European Commission has decided not to oppose the notified operation and to  declare  it  compatible  with  the
       internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

                                        For the Commission

                                        signed
                                        Martine REICHERTS
                                        Member of the Commission

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

[2]   Publication in the Official Journal of the European Union No C 217, 10.7.2014, p. 35.

[3]   Turnover calculated in accordance with Article 5 of the Merger Regulation.

[4]   Case COMP/M.6969, Valeant Pharmaceuticals International/Bausch & Lomb Holdings.

[5]   Case COMP/M.4579, Investor/Morgan Stanley/ Molnlicke.

[6]   Case COMP/M.6969, Valeant Pharmaceuticals International/Bausch & Lomb Holdings.

[7]   Case COMP/M.5805, 3i/Vedici Groupe; Case COMP/M.5548, Barclays/RBS/Hillary; Case COMP/M. 4367, APW/APSA/Nordic Capital/Capio.

[8]   Case COMP/M.4229, APHL/L&R/Netcare General Healthcare Group; Case COMP/M.4788 Rozier/BHS.

[9]   The French Competition Authority proposed in a recent case, two segmentations of the market for the provision  of  hospital  services.  The
      first segmentation is based on the "group of specialties" defined by the Public Health Code  (medicine,  surgery,  obstetrics,  gynaecology
      etc.). The second segmentation is narrower and based on the "major categories of diagnostics" defined by the Regional Health Agencies. Both
      segmentations can be used for the competitive assessment of an operation on the market for the provision of hospital services. Nonetheless,
      the French Competition Authority left the exact product market definition open.

[10]  Case COMP/M.4229, APHL/L&R/Netcare General Healthcare Group; Case COMP/M.4788 Rozier/BHS.

[11]  Case COMP/M.5805, 3i/Vedici Groupe; Case COMP/M.5548, Barclays/RBS/Hillary.

[12]  In a recent case (Decision n°13-DCC-164 of the French Competition Authority, relative à  la  prise  de  contrôle  conjoint  de  la  société
      Almaviva Santé par la société UI Gestion et la société Gimv), the French Competition Authority has also noted  that  the  exact  geographic
      market definition can vary depending of specific local elements such as the clinic, the specialties proposed to the patients and  the  area
      at stake (namely its population and the number of clinics). In this decision, the French Competition Authority left  the  exact  geographic
      market definition open.

[13]  In line with the previous decisions of the Commission and the French Competition Authority, the Notifying Party submits the  market  shares
      of Bridgepoint on the market for the supply of hospital services at three levels: (a) at the level of the "group of specialties" defined by
      the Public Health Code, in this case the relevant group of  specialties  is  surgery;  (b)  at  the  level  of  the  "major  categories  of
      diagnostics" defined by Regional Health Authorities, in this case the major category  of  diagnostic  is  the  category  n°  2  "ophthalmic
      conditions"; (c) at the level of the "major category of diagnostics" defined by Regional  Health  Authorities,  in  this  case  this  major
      category of diagnostic is the category n° 3 "ear, nose, throat, mouth and teeth conditions".

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

                                                                 MERGER PROCEDURE

                                                                  PUBLIC VERSION