The Commission has granted clearance to GlaxoSmithKline (GSK) to acquire the consumer healthcare business of Novartis AG (Novartis). As a result of the acquisition, the consumer healthcare businesses of both parties will be merged into a new, GSK controlled company called GlaxoSmithKline Consumer Healthcare Ltd.

Prior to the merger, in New Zealand GSK operated consumer healthcare and prescription pharmaceutical divisions. Novartis’ consumer healthcare division in New Zealand was operated from Australia. Novartis will continue to operate prescription pharmaceutical and animal health products divisions in New Zealand.

In assessing the application for clearance, the Commission considered that the acquisition would result in an overlap of the parties’ products in a number of markets. These markets include the wholesale supply of systemic pain relief products, and cold sore treatments.

The Commission is satisfied that the acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in any of these markets.

“The merged firm will continue to face competition from a number of existing suppliers. We also consider that the merging parties are not close competitors in any of the relevant markets. We are therefore satisfied that there is unlikely to be a substantial lessening of competition as a result of the acquisition,” said Commerce Commission Chairman Dr Mark Berry.

A public version of the written reasons for the decision will be available shortly on the Clearances register.

Background

On 22 April 2014, the parties announced a large, global transaction which involved three separate acquisitions. Under the wider transaction, GSK will also acquire Novartis’ global human vaccines business and Novartis will acquire a portfolio of GSK’s oncology products. The Commission’s decision to grant clearance relates only to the consumer healthcare transaction.