The Australian Competition and Consumer Commission today announced that it will not oppose the proposed acquisition of Wyeth Corp by Pfizer Inc after competition concerns were resolved by Pfizer's undertaking to sell certain Australian animal health assets.
Pfizer and Wyeth, both global pharmaceutical companies, entered into an agreement under which Pfizer proposed to acquire Wyeth. The transaction is being reviewed by a number of competition agencies around the world.
In Australia, Pfizer and Wyeth compete in a number of human and animal health markets, with Wyeth operating its animal health business here under the name Fort Dodge Australia.
After consultation with a range of market participants, including wholesalers, veterinarians, government agencies and other pharmaceutical manufacturers, the ACCC identified a number of animal health markets where divestitures were required to address competition concerns.
The ACCC concluded that the proposed acquisition would significantly increase concentration in a number of animal vaccine markets, due to the limited number of current suppliers. Without the proposed divestitures, there would be three or less suppliers, including Pfizer, in the animal vaccine markets.
"The ACCC found that new entrants or imports were unlikely to effectively constrain the merged entity due to significant regulatory and other barriers associated with the manufacture and importation of vaccines," ACCC chairman, Graeme Samuel, said.
Further, the ACCC concluded that the merged entity would have considerable market power in certain animal pharmaceutical markets, through the supply of market leading cattle and sheep worming products. The ACCC found that other cattle and sheep worming products would be unlikely to constrain the merged firm and generic entry was unlikely to be timely or effective given the difficulties in accessing the active ingredient used to make these worming products.
To address these concerns Pfizer offered a court enforceable undertaking that will see certain Fort Dodge assets sold after completion of the acquisition. In consulting on the undertaking, market participants widely agreed the competition concerns would be resolved through the sale of the assets as two packages
- the Fort Dodge companion animal business, including a number of companion animal products, to be sold to Boehringer Ingelheim, which the ACCC has approved as the purchaser, and
- the livestock business, which includes a number of Fort Dodge livestock products, a manufacturing facility located in Penrith.
Generally, market participants did not raise competition concerns in relation to the human health markets and the ACCC did not identify any further concerns in these markets.
In conducting its review the ACCC closely coordinated with agencies in other countries which were also reviewing the transaction.
"The ACCC is satisfied, taking into account the undertaking, that the proposed acquisition of Wyeth by Pfizer is unlikely to substantially lessen competition," Mr Samuel said.
The undertaking will be available on the ACCC's website.
A Public Competition Assessment outlining the ACCC's reasons for its decision will be available on the ACCC's website in due course (refer to Public Competition Assessments).