GE Medical Systems has extended its $2.06 billion offer to buy Finnish healthcare technology firm Instrumentarium until August 29, as the EU’s Competition Commission begins a formal four-month investigation of the deal. The offer was originally set to expire on April 11.
Instrumentarium and Waukesha, WI-based GE have also received requests for additional information from the U.S. Department of Justice, according to a statement from GE, which said both firms are working with regulatory agencies in the U.S. and Europe, and that the acquisition is still expected to close in the second or third quarter of 2003.
EU Competition Commissioner Mario Monti said the proposed acquisition raises "competitive problems." According to a report by Reuters, the EU is concerned the combined company’s market share might be too big.
"The initial investigation has shown that the merger combines two major competitors and leads to high market share in the markets in the EEA (European Economic Area) and in some member states," Monti said at an April 2 news conference. "The merger also raises vertical issues."
GE's intent with the acquisition is to create an integrated operating room that would encompass anesthesia delivery equipment and patient monitoring and information systems, according to the vendor.
Helsinki-based Instrumentarium has two business units -- anesthesia and critical care (including its Datex-Ohmeda, Spacelabs Medical, Deio, and Instrumed units) and medical equipment (comprising its Instrumentarium Imaging, Soredex, Ohmeda Medical, and Medko Medical companies). In 2001, Instrumentarium had sales of $920 million.
The commission case team looking into the proposed acquisition is virtually the same one that handled GE's failed proposal to acquire Honeywell International, according to sources quoted by Reuters.
In that controversial 2001 case, the U.S. Justice Department approved the deal while the EU Commission rejected it, creating international tensions. The decision even prompted criticism from President George W. Bush and members of his cabinet.
However the GE-Instrumentarium case is vastly different, in that the Justice Department has already decided to carry out its own full investigation of the deal.
By AuntMinnie.com staff writers
April 4, 2003
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GE buys Ambassador Medical, January 7, 2003
GE bids to purchase Instrumentarium, December 18, 2002
Instrumentarium gets 510(k) clearance for digital mammo systems, October 3, 2002
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