Antitrust Law Daily EC conditionally approves acquisition of Varian Medical Systems by Siemens
Friday, February 19, 2021

EC conditionally approves acquisition of Varian Medical Systems by Siemens

By Linda O’Brien, J.D., LL.M.

Investigation found that, without required commitments, the acquisition would have likely led to reduced choice in products and loss of innovation to the detriment of customers and patients.

The European Commission (EC) has approved, under the EU Merger Regulation, the proposed acquisition of Varian Medical Systems by Siemens AG, through its subsidiary Siemens Healthineers, the EC has announced. The approval is conditioned on the full compliance with the commitments offered by Siemens to ensure the interoperability of the companies’ medical imaging and radiotherapy solutions with third-party solutions.

Siemens said today that the closing of the transaction remains subject to receipt of regulatory approvals in other countries but that it expects to close the deal in the first half of 2021. There has been no word from U.S. antitrust agencies on the transaction.

Siemens, headquartered in Germany, is a technology group active worldwide and focusing on various areas including medical technology and digital healthcare services. Its subsidiary Siemens Healthineers provides healthcare solutions and services worldwide, including among others imaging healthcare solutions. Varian, headquartered in the United States, is a global provider of medical devices and software solutions for treating cancer and other medical conditions with radiotherapy and other advanced treatments.

Investigation. The EC had concerns that the transaction, when notified of the proposal in December 2020, would lead to the foreclosure of competitors in the European Economic Area (EEA) and the United Kingdom on the markets for: (1) the supply of medical imaging solutions, namely computed tomography scanners, magnetic resonance imaging scanners and positron emission tomography scanners; and (2) the supply of radiotherapy solutions, oncology software, and motion management devices.

Commitments. To address the EC's concerns, Siemens Healthineers committed to continue adhering to the industry-wide interoperability standard and to ensure interoperability between (1) its medical imaging solutions and rivals' radiotherapy solutions and (2) its radiotherapy solutions and rival's imaging solutions, by providing the relevant information and technical assistance to third parties and customers. The commitments will run for an initial term of ten years, which the EC may decide to extend by an additional five years if necessary.

"High quality medical imaging and radiotherapy solutions are crucial to diagnose and treat cancer. The efficiency and safety of treatment relies on the ability of these products to work together," said Executive Vice-President Margrethe Vestager, in charge of competition policy for the EC. "Our decision will make sure that radiotherapy patients receive the best possible treatment by ensuring that the rivals of Siemens Healthineers and Varian will have all the information and help they need to make their products work smoothly with those of the parties and to continue innovating. With the interoperability commitments, the merger can go ahead whilst preserving competition and innovation in these markets."

Siemens and Varian statements. In August 2020, Varian announced that the company had entered into a definitive agreement to combine with Siemens Healthineers in a transaction valued at $16.4 billion. The combined company will offer an integrated platform of end-to-end oncology solutions to address the entire continuum of cancer care, from screening and diagnosis to care delivery and post-treatment survivorship.

"With this combination of two leading companies we make two leaps in one step: A leap in the fight against cancer and a leap in our overall impact on healthcare," stated Dr. Bernd Montag, CEO of Siemens Healthineers AG. "This decisive moment in the history of our companies means more hope and less uncertainty for patients, an even stronger partner for our customers, and for society more effective and efficient medical care. Together with Varian’s outstanding and passionate employees, we will shape the future of healthcare more than ever before."

Companies: Varian Medical Systems; Siemens AG; Siemens Healthineers AG

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