Published On : 2019-07-11
Under the EU Merger Regulation, the European Commission has given the green signal to GlaxoSmithKline, a UK multinational pharmaceutical company, for the acquisition of the consumer health business of Pfizer, a US multinational pharmaceutical corporation. The European Commission’s decision to approve the transaction is conditional upon complete compliance with commitments related to the global divestment of the topical pain management business that Pfizer operates with the ThermaCare brand. One of the main concerns regarding the acquisition was reduced competition in the topical pain management market, which could result in increased prices in the Netherlands, Italy, Ireland, Germany, Austria, and other European Economic Area (EEA) countries.
The divestiture of Pfizer’s topical pain management business will include every applicable asset that plays a major role in maintaining the competitiveness and viability of the business and contributes to its current operation. As a package, these assets are needed to be divested to one suitable buyer. In addition, there will be divestment of every intellectual property right related to the ThermaCare brand and products and also products that are being developed.
European Commission’s investigation shows the acquisition would not raise competition concerns
The investigation conducted by the European Commission before approving the acquisition included examining if the markets, where the activities of GlaxoSmithKline and Pfizer’s consumer health business overlap, would be affected because of the transaction. In the topical pain management market, Pfizer shows high activeness in the EEA on the back of its various products sold under the ThermaCare brand. These products mainly include non-medicated patches. GlaxoSmithKline is also a prominent player in the market, with an array of Volta-branded products sold. In the EEA, the company is one of the top OTC suppliers.
In the EEA, the overlaps between the businesses of the two companies will be almost completely removed by the commitments related to the divestment of Pfizer’s topical pain management business. One of these commitments is the divestiture of Pfizer’s US manufacturing location dedicated to produce ThermaCare products. After completing its investigation, the European Commission concluded that the acquisition would not create competition concerns in the EEA, provided the commitments are kept by the two companies.
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