Today, the FTC announced that it will challenge Hologic Inc.’s 2005 purchase of the breast cancer screening and diagnosis business of Fischer Imaging Corporation. In its complaint, the FTC alleged that Hologic’s acquisition of Fischer’s prone stereotactic breast biopsy systems (SBBSs) business harmed American consumers by eliminating its only significant competitor for the sale of SBBSs in the United States.
Hologic paid $32 million for Fischer’s intellectual property and other assets in September 2005. The assets related to Fischer's mammography and breast biopsy businesses, including patents, trademarks, and customer and vendor lists for Fischer’s prone SBBS product, MammoTest. At the time, Fischer was Hologic’s only significant competitor in the U.S. market for prone SBBSs. As a result of the acquisition, Fischer relinquished all of its rights to develop, market, and sell prone SBBSs in the United States. According the government's complaint, the deal gave Hologic a "a virtual monopoly in the U.S. prone SBBS market."
Because this deal was worth less than the $56.7 million filing threshold under the Hart-Scott-Rodino Premerger Notification Act (HSR Act), it was not reportable to the federal antitrust agencies. The FTC nevertheless learned of it--likely as a result of a customer complaint--and challenged it anyway. Hologic must now divest itself of the assets, which it has agreed to do. Siemens AG will buy the assets.
The FTC's enforcement action here is a reminder to us all--any deal, big or small, reportable or not--can get the attention of the government. There are any number of ways that could happen: news of the parties' deal gets picked up by trade press monitored by government lawyers; the acquiring company starts raising prices thereby inducing customers to contact the government and complain; or a disgruntled competitor could complain. By closing the deal with Fischer, Hologic gambled. Now, ten months later, we know the results. It lost.
