The Australian Competition and Consumer Commission has announced that it will not oppose Reckitt Benckiser Brands Limited’s proposed acquisition of the K-Y brand from Johnson & Johnson.
Reckitt Benckiser and K-Y overlap in the supply of personal lubricant products. Reckitt Benckiser owns the Durex brand, including its personal lubricant products, and K-Y is a well-recognised personal lubricant brand.
The ACCC’s public review focussed on whether, as a result of the proposed acquisition, Reckitt Benckiser would be able to increase the price of Durex and K-Y-branded personal lubricant products.
“The ACCC determined that the presence of alternative suppliers is likely to constrain Reckitt Benckiser’s ability to increase prices following the acquisition,” ACCC Commissioner Dr Jill Walker said.
Market feedback also indicated that the Durex and K-Y personal lubricant brands were not particularly close competitors, with their key products aimed at different customer segments. Key rival, Ansell was considered a closer competitor to K-Y and the products supplied by smaller suppliers, which are also stocked in major supermarkets and pharmacies, were also considered likely to provide an important competitive constraint on Reckitt Benckiser.
“The ACCC also determined that the proposed acquisition was unlikely to raise competition concerns in any other markets in which Reckitt Benckiser is active,” Dr Walker said.
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