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Merger of FUJIFILM Corporation and Hitachi, Ltd. approved subject to conditions

Competition concerns in relation to endoscopic ultrasound systems

The merger of FUJIFILM Corporation and Hitachi, Ltd. was initially notified in Austria on 20 May 2020 (Z-4896). Fujifilm Corporation applied for approval of its planned acquisition of all of the shares in and thus sole control of the diagnostic imaging business of Hitachi, Ltd.

Business sector concerned: Manufacturing of radiology and electrotherapy equipment and electronic medical devices

Due to competition concerns in relation to the business area of endoscopic ultrasound systems, the Austrian Federal Competition Authority (AFCA) and the Federal Cartel Prosecutor filed a request for examination with the Cartel Court in July 2020. The notifying parties subsequently withdrew their application in Austria, and then notified the AFCA once more of the merger on 11 January 2021 (Z-5195).

In the course of the planned merger, the diagnostic imaging unit is to be taken over by Fujifilm Corporation.

The business activities of the companies overlap in Austria and the European Economic Area with regard to the following product categories:

  • Computed tomography scanners
  • External ultrasound systems
  • Endoscopic ultrasound systems

Competition concerns

No relevant decisions have so far been reached at the Austrian or European level pertaining to the area of endoscopic ultrasound (EUS) systems or their components, ultrasound monitoring equipment (UME) or ultrasound endoscopes.

The notifying party is the only EUS supplier that manufactures both ultrasound endoscopes and UME (specifically box-type models). The other EUS manufacturers (the Hitachi target business and two further competitors) each only produce one of the components themselves (ultrasound endoscopes or UME), with Hitachi producing both types of UME (boxes and consoles). They all purchase the components that they do not manufacture themselves from their competitors (particularly from Hitachi).

After the planned merger has gone through, the merged company will no longer be as dependent on the sales of its two competitors as it will be able to manufacture both box-type and console-type UME and EUS itself. The merged company could therefore increase the prices for UME sold to its two competitors, which might impact negatively on competition.

Agreed conditions

To dispel those competition concerns, the notifying parties proposed that those commitments (conditions) that were agreed with the Japan Fair Trade Commission during the merger notification in Japan should also be expressly submitted to the AFCA and the Federal Cartel Prosecutor.

Fujifilm undertakes to supply an EUS manufacturer with UME, related parts and services continuously and on a lasting basis, as well as to introduce mechanisms to ensure that this competitor’s trade secrets are treated confidentially and not disclosed to Fujifilm’s EUS unit.

The exact conditions agreed can be found here (in German):

Commitments Z-5195 FUJIFILM Corporation; Diagnostic Imaging Geschäftsbereichs von Hitachi, Ltd. (German Version)