UK competition watchdog puts Thermo Fisher-Roper deal under the microscope

(Reuters) - Britain's competition watchdog said on Wednesday Thermo Fisher Scientific Inc's TMO.N $925 million acquisition of Roper Technologies Inc's ROP.N unit Gatan raised concerns that prices of microscopes could go up and quality could suffer.

U.S.-based Thermo Fisher - the world’s largest maker of scientific instruments - said in June it would buy Gatan, a Pleasanton, California-based maker of instruments and software used to enhance the performance of electron microscopes.

The Competition and Markets Authority (CMA) said the deal could affect two rivals of Thermo Fisher who use Gatan products with their electron microscopes.

“The CMA is concerned that the proposed deal could allow Thermo Fisher to weaken its competitors, enhancing its own already strong market position, and lead to higher prices for customers using electron microscopes,” the watchdog said in a statement.

Thermo Fisher said in June that Gatan, which is part of Roper’s medical and scientific imaging unit, was expected to generate about $150 million in revenue in 2018.

“Both parties continue to work cooperatively with the CMA through the review process. All other regulatory approval conditions have been satisfied,” Waltham, Massachusetts-based Thermo Fisher said on Wednesday.

(For a graphic on 'Thermo Fisher buoyed by Gatan deal' click

CMA was also concerned that the merger would leave Thermo Fisher with insufficient competition in the market for direct detection cameras.

The watchdog said the merger would be referred for an in-depth Phase 2 investigation if the firms did not address its concerns.

Thermo Fisher, which employs 70,000 people globally, is involved in life sciences research, diagnostics and laboratory products and services.

The firm reported a better-than-expected third-quarter profit in October on higher demand for its laboratory products and raised its full-year forecast.

Gatan is set to become a part of Thermo Fisher’s analytical instruments segment.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty