Bundeskartellamt prohibits merger between Synthes-Stratec / Mathys Medizinaltechnik

The Bundeskartellamt in Bonn has prohibited the medical technology manufacturer Synthes-Stratec Inc. (USA) from acquiring the osteosynthesis business division (products for surgical fracture treatment) from Mathys Medizinaltechnik AG (Switzerland). The participating companies notified the project to the Bundeskartellamt on 17 September 2003. On 10 February 2004 the Bundeskartellamt informed the companies of its intention to prohibit the merger.

In Germany the merger would lead to Synthes-Stratec acquiring a dominant position in the market for implants (particularly plates, screws and nails) and instruments for trauma treatment. The medical products concerned are required by hospitals for the surgical treatment of bone fractures. While Synthes-Stratec and Mathys operate worldwide Germany is the only market in which both companies are active. The merger would thus result in substantial market share additions in Germany. According to the Bundeskartellamt’s investigations Synthes-Stratec’s domestic market share after the acquisition of Mathys’ trauma treatment division would be clearly above 45 per cent and thus considerably exceed the threshold for assuming dominance under the Act Against Restraints of Competition (ARC). The market shares held by the two following competitors are clearly lower and the remaining supply market is largely fractured. In addition Synthes-Stratec and Mathys have paramount access to medical decision-makers on the demand side, which has considerable discouraging effects on existing competitors and constitutes a major barrier to market entry for potential competitors.

Although the proceedings were extended several times, the participating parties were not able to dispel the Bundeskartellamt’s competition concerns. The planned acquisition was thus to be prohibited. The companies involved can file an appeal against this decision at the Düsseldorf Higher Regional Court.