Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
IP/06/1726 Brussels, 11th December 2006 Mergers: Commission approves proposed acquisition of Pfizer's consumer healthcare business by Johnson & Johnson, subject to conditions The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Pfizer's consumer healthcare business ("PCH") by Johnson & Johnson (“J&J”), subject to conditions. The Commission found that the proposed transaction as initially notified would give rise to competition concerns in three product areas: topical dermatological antifungals in Italy, daily-use mouthwash in Greece and nicotine replacement therapy ("NRT") products in the EEA. However, J&J has offered to divest the overlapping activities in Italy and in Greece and, in whole or in part, its global nicotine patch manufacturing business. The remedies remove all overlaps between J&J and PCH for topical dermatological antifungals and daily-use mouthwash and remove the vertical relationship between J&J's nicotine patch manufacturing activities and PCH's NRT business. In the light of these commitments, the Commission has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. Competition Commissioner Neelie Kroes said: "The transaction proposes a major restructuring of the over-the-counter pharmaceutical and personal care product segment in Europe. The remedies offered by J&J fully address the concerns we had identified, including those concerning nicotine patches. I am thus confident that these markets will remain competitive". J&J is a leading healthcare group active worldwide in three business segments: pharmaceuticals; consumer products and medical devices and diagnostics. PCH is Pfizer’s worldwide business division active in over-the-counter (“OTC”) pharmaceuticals and personal care products. The Commission’s investigation focused on the few product areas where the activities of J&J and PCH overlap. The investigation revealed that the proposed transaction would not significantly modify the structure of most of the concerned markets and that a number of credible alternative competitors would continue to exercise a competitive constraint on the merged entity. However, the Commission found that the proposed transaction could significantly impede effective competition for topical dermatological antifungals in Italy and dailyuse mouthwash in Greece. In Italy, the combination of the topical dermatological antifungals of J&J (with the brands Daktarin, Pevaryl and Nizoral) and PCH (with the brand Trosyd) would have reduced the number of players on the market from three to two. In Greece, J&J (with the brand ACT) and PCH (with the brand Listerine) are the two leading suppliers of daily-use mouthwash. To resolve these competitive concerns, J&J proposed to divest the OTC topical dermatological antifungal formulations supplied by PCH in Italy under the trademark Trosyd and its ACT daily-use mouthwash business EEA-wide. The divestitures consist of the sale of the relevant assets for the manufacture and sale of the products. These assets include goods and inventory, marketing authorisations, the trademarks, intellectual property rights and know-how. The Commission considers that these businesses are viable and that their divestiture solves the competition concerns. As regards the NRT segment, the competition concerns stem from the vertical relationship between J&J’s subsidiary, ALZA, and GlaxoSmithKline (“GSK”), for which ALZA manufactures nicotine patches. Through the proposed transaction, J&J would acquire PCH's Nicorette NRT business, which directly competes with GSK's NiQuitin NRT business. Post-merger, the combined entity could thus have the ability and the incentive to engage in input foreclosure strategies vis-à-vis GSK and would have access to confidential information from one of its main competitors. J&J offered to divest ALZA's international nicotine patch business (global business, excluding the US, Canada and South Korea). In case such divestiture has not taken place within a given time, J&J would divest ALZA's global nicotine patch business (including sales in the US, Canada and South Korea). The main assets to be transferred are the relevant supply agreements, trademarks, technology and, as an option for the purchaser, ALZA's nicotine patch production lines. In addition, J&J committed to provide manufacturing capacities and technical assistance to the purchaser until the latter has become fully operational. Following the divestiture of ALZA's nicotine patch business, the purchaser would thus be in a position to supply GSK's requirements in the EEA independently from J&J. The Commission has reviewed J&J's proposal and considers that ALZA's international and global nicotine patch businesses are both viable and that their divestiture is an operable and viable solution to protect competition. More information on the case will be available at: http://ec.europa.eu/comm/competition/mergers/cases/index/m86.html#m_4314 2