The Commerce Commission has received an application from GlaxoSmithKline Plc (GSK) seeking clearance to acquire Novartis AG’s consumer healthcare pharmaceutical business.

GSK is an international healthcare company active in over 150 countries worldwide. GSK’s principal areas of operation are in the development, manufacture and sale of pharmaceutical, vaccine, and consumer healthcare products. In New Zealand, GSK operates consumer healthcare and prescription pharmaceutical divisions.

Novartis is a global group of healthcare companies active in a range of areas including pharmaceuticals, eye care, animal health, vaccines and consumer health. In New Zealand, Novartis has a marketing, sales and distribution operation for its pharmaceutical and animal health products. Novartis’ consumer healthcare operation in New Zealand is operated from Australia.

The proposed merger relates to the parties’ activities in the wholesale supply of a range of over the counter consumer healthcare products. The product categories impacted by the merger include products for the management of cold sores, systemic pain relief products, anti-smoking products, topical nasal preparations, and anti-fungal and anti-viral products. A public version of the application will be available shortly on our Clearances Register.

Background

On 22 April 2014 the parties announced a large, global transaction which involves 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. This clearance application relates only to the consumer healthcare transaction.

Assessing an application for a merger or acquisition

When considering a proposed merger or acquisition, the Commission must decide whether the competition that is lost in a market when two businesses merge is substantial. We will give clearance to a proposed merger only if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

A fact sheet explaining how the Commission assesses a merger application is available.