PHARMACEUTICALS: COMMISSION AUTHORISES MEGA-MERGER BETWEEN ASTRA AND ZENECA, UNDER CONDITIONS.
The Commission announced on March 1 that it had cleared the deal giving Zeneca all the shares in Astra. Although described as a "merger of equals", the deal is in fact a public takeover bid by Zeneca for Astra to form a new jointly-managed company, AstraZeneca, owned 46.5% by Astra and 53.5% by Zeneca. Both groups' main business is research, production and sales of pharmaceutical products, but the British company also has a big agro-chemicals and speciality chemicals business and Astra makes some medical devices, too. Their activities overlap mainly in the field of anti-hypertension drugs (against high blood pressure), anaesthetics and anti-asthmatics. In order to help iron out concerns that the Commission's competition authorities originally had about this mega-merger, Astra and Zeneca agreed to divest their exclusive distribution rights for Tenormin (a plain betablocker made by Zeneca) in Sweden and Norway. The Commission found that the firms' activities overlapped in these markets - giving them market shares of more than 50%. Astra's entire interest in dual combined betablockers throughout the European Economic Area (EEA) will also have to be divested to a viable independent third party.
Furthermore, in the area of local anaesthetics (where Astra is the world market leader), Zeneca has undertaken to reverse all arrangements relating to Chirocaine, a new long-acting local anaesthetic which Zeneca licensed-in last year.
These remedies, whose implementation will be closely monitored by the Commission, will remove the competitive concerns relating to the two firms' activities in betablockers and local anaesthetics.
The companies' activities in other areas are largely complementary in nature: Astra is the market leader in gastro-intestinal drugs, but Zeneca is not active in this field. And while the British group is the second biggest in oncology (cancer treatment), Astra is not active in this field. The Commission also examined the market for anti-asthmatics. Although Astra has a number of well-established anti-asthma products, Zeneca had no such activities until the recent development of Accolate, a leukotriene receptor antagonist (LTRA). This is a new class of products which is now being introduced in Europe. In view of the fact that the companies' market share in most EEA states is equal or less than 30%, the strong position of rival firm Glaxo Wellcome (itself the product of another big merger) and other competitors such as Novartis, Rh"ne-Poulenc and Merck, which has also developed an LTRA, the merger "did not raise competition concerns with regard to anti-asthmatics", the Commission concluded
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|Date:||Mar 3, 1999|
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