III. COMPETITIVE ASSESSMENT U.K.

A. Interventional cardiology U.K.

(16) Interventional cardiology is a relatively recent, innovation driven business which is characterised by significant barriers to entry, i.e. R & D financing, intellectual property rights for product development, long time-to-market for new products, clinical trials, and product range. U.K.

(17) In the area of interventional cardiology there are two leagues of players: large global companies competing on a worldwide level (J & J, Guidant, Medtronic, Boston Scientific and Abbott) and ‘local players’ (Sorin, Biotronik and others). U.K.

1. Drug-eluting stents U.K.

(18) In the market for DES, the concentration would result in the removal of a potential competitor given that Guidant is present only in BMS and not yet in DES, while J & J is one of the only two players already active in this segment, the other being Boston Scientific. U.K.

(19) Despite the fact that there is an indication that Guidant would likely have been one of the key players in the market for DES, acting as a major competitive constraint vis-à-vis the two current competitors J & J and Boston Scientific, the evidence collected in the investigation also proved that the other new entrants will be likely to exert sufficient competitive constraints on the market for DES, compensating for the loss of competition resulting from J & J’s acquisition of Guidant (Medtronic, Abbott, Conor/Biotronik and Sorin). U.K.

(20) The Commission, therefore, concluded that the notified concentration does not raise any serious doubts as to its compatibility with the common market with regard to DES and thus, the concentration will not significantly impede effective competition in the common market for DES. U.K.

2. Steerable guidewires U.K.

(21) In the interventional cardiology market for steerable guidewires virtually all national markets are strongly affected by the concentration (above 40 % and with an increment of at least 5 %), and in many of these, including the largest countries of the EU, the parties’ combined market shares are above (65 to 75 %) and even (75 to 85 %). U.K.

3. Conclusion U.K.

(22) The Commission, therefore, concluded that the notified concentration raises serious doubts as to its compatibility with the common market by enabling the merging parties to strengthen Guidant’s uncontested leadership, in so far as it removes one of the only two main competitors in this market. Further, the remaining firms in the market may even be expected to benefit from the reduction in competition which will result from the merger; the increase in concentration will enable them to attain higher prices than would otherwise have been the case. U.K.

B. Endovascular devices U.K.

(23) Both J & J and Guidant are leading suppliers in the area of endovascular devices in the EEA. Although there is a fair number of competitors in the endovascular markets (Abbott, Bard, Boston Scientific, B.Braun, Cook, Edwards Lifesciences, ev3, Invatec, Medtronic, Sorin and Terumo), not all players have the same strength or are present in all product or geographic markets. Moreover, the market investigation has highlighted that the disappearance of Guidant as a competitor will eliminate the closest substitute to J & J stents. U.K.

(24) In the endovascular market for balloon expandable stents, at EEA level, the combined market share of the merging parties amounts to (60 to 70 %), (J & J, (30 to 40 %), Guidant, (25 to 35 %)). Those market shares have been relatively stable for the past four years. U.K.

(25) When looking at the relevant geographic markets, i.e. each Member State, for the purpose of the competitive assessment, there are nine countries more substantially affected, namely: Austria, Belgium, France, Germany, Italy, Luxembourg, Netherlands, Portugal and Spain. U.K.

(26) Having regard to the fact that the merger combines the strongest and second strongest player, it will create a dominant position in virtually all the markets considered and will lead to a significant impediment to effective competition. U.K.

(27) In the endovascular market for Carotid stents in the EEA, the member States most substantially affected are: Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Portugal and Spain. U.K.

(28) There are three main players in the carotid stent market: J & J, Guidant and Boston Scientific. Together they account for 83 to 96 % of the market. The concentration will either reinforce the leadership of J & J or Guidant (in Austria, Finland, the Netherlands, Portugal and Spain) or combine the second and third player to create a new market leader (Belgium, Germany and Italy). U.K.

(29) In the above national markets, given the degree of concentration, barriers to entry, customer loyalty, closeness of substitution and, as a result of the elimination of a major competitive constraint, the operation will give rise to unilateral adverse effects in those markets and therefore impede effective competition in the common market. U.K.

(30) In the endovascular devices market for non-carotid stents, the Member States most substantially affected are: Austria, Belgium, Germany and the Netherlands. In most of these markets, J & J is market leader and Guidant is one of the leading players and is considered by the majority of the customers as the closest substitute to J & J. U.K.

(31) With regard to non-carotid SX stents in the above national markets, the concentration will give rise to non-coordinated adverse effects in those national markets and therefore impede effective competition in the common market and the EEA as a result of the creation or strengthening of a dominant position. U.K.

(32) The Commission, therefore, concluded that the notified concentration raises serious doubts as to its compatibility with the common market with regard to endovascular stents market. The concentration will create a dominant position in balloon expandable stents market and will give rise to unilateral adverse effects in carotid and non-carotid stents markets and therefore will impede effective competition in the common market. U.K.

C. Cardiac surgery: endoscopic vessel harvesting systems U.K.

(33) The EEA sales of EVH systems are significantly lower than in the United States but show a growing trend. In Europe, traditional vessel harvesting is used in the large majority (98 %) of procedures. J & J and Guidant are virtually the only two suppliers of EVH systems, with market shares estimated at 90 to 95 % by the parties and 100 % by market players across Europe. U.K.

(34) The Commission, therefore, concluded that the notified concentration raises serious doubts as to its compatibility with the common market with regard to the EVH systems and will result in creation of a virtual monopoly across Europe. U.K.