Thermo Fisher Sells Businesses Before Purchase of Life Technologies

On January 6, 2014, Thermo Fisher Scientific (Waltham, MA, USA) announced a USD 1.06 billion sale of multiple business units to GE Healthcare (Little Chalfont, United Kingdom), as a condition of regulatory approval for Thermo Fisher's acquisition of Life Technologies (Carlsbad, CA, USA).

The businesses sold to General Electric's life sciences arm include Thermo Fisher's cell culture, gene modulation, and magnetic beads units, which Thermo Fisher believes to have generated a combined USD 250 million in revenue over the past year. Goldman Sachs analysts said they do not expect the deal to have a major impact on Thermo Fisher's continued growth.

The divestiture has been expected since November 2013 when Thermo Fisher announced that it had reached an agreement with the European Commission to approve the purchase of Life Technologies.

If not for the sales announced on January 16, 2014, the acquisition would have left Thermo Fisher with almost 50% of the cell culture market. In the US, the Federal Trade Commission (FTC) approval for the Life Technologies purchase is still pending, but Thermo Fisher has stated that they do not expect the FTC to raise any additional hurdles.

In the genomics world, the USD 13.6 billion acquisition of Life Technologies has focused on Life's Ion Torrent arm, the gene sequencing unit that has been making gains against market leader Illumina. Ion Torrent has been noted for its rapid development and heavy investments in R&D, including a yet-unreleased semiconductor chip for the Ion Proton sequencer that could make the instrument competitive in high-throughput sequencing with Illumina's HiSeq 2500.

Thermo Fisher has the resources to pour even more funding into the Ion Torrent line. However, it is unknown what the new parent company's intentions are for Life Technologies, which has a huge portfolio of biotechnology products, any number of which will fit into Thermo Fisher's existing pipelines in sample prep, synthetic biology, forensics, and other research and clinical applications. Thermo Fisher is not known for its emphasis on R&D; in fact, in recent years, the smaller Life Technologies has occasionally outspent Thermo Fisher in this area.

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