Mergers: Commission approves acquisition of Bayer’s animal health division by Elanco, subject to conditions

animal

(Sean McGee, Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Bayer AGs animal health division by Elanco Animal Health Inc. The decision is conditional on the divestment of otitis products and several types of parasiticides in the European Economic Area (EEA), the UK and globally.

Executive Vice-President Margrethe Vestager, responsible for competition policy, said: “Veterinaries, pet-owners and farmers count on innovative and competitively priced pharmaceutical products for animals. The acquisition by Elanco of Bayer’s Animal Health division would have significantly reduced the current and future choice of competing and innovative drugs available to vets, pet owners and farmers for certain animal diseases. With the divestment of current and pipeline products treating ear infections and parasites in pets and livestock, the merger can go ahead whilst preserving competition and innovation in these markets.“

The transaction would lead to the creation of the second largest animal health company globally. Both Elanco and Bayer’s animal health division (“BAH”) develop and supply pharmaceuticals for pets and livestock worldwide.

The Commission’s investigation

The Commission’s investigation focused on the market for pharmaceuticals products for pets and livestock, which are sold to vets, farmers and pet-owners. Animal pharmaceuticals encompass a wide group of products to prevent or treat a large range of animal diseases and disorders.

Within pharmaceuticals for animals, there is a clear distinction between drugs for pets and livestock. For each of them, it is possible to distinguish different groups of drugs used to treat different diseases, such as parasiticides to kill parasites or antimicrobials to treat infections caused by microbes or bacteria.

The Commission found that the transaction, as originally notified, would have raised competition concerns in a number of countries in the EEA/UK in relation to otitis products for pets, as well as several types of parasiticides, namely (i) anticoccidials for ruminants (cattle and sheep) and (ii) parasiticides for pets (treatments against parasites). In these markets, both companies have strong positions and/or face a limited number of competitors.

The Commission found that for the pharmaceuticals for animals involved in this case, competition between suppliers typically takes place at the national level, due to the existence of national regulatory regimes and distribution systems.

The Commission’s investigation found that no competition concerns arise for the majority of the products supplied by both Elanco and BAH.

The proposed remedies

To address these concerns, Elanco and BAH offered to divest to one or more suitable purchasers, Elanco or BAH’s products and/or pipelines in relation to otitis, anticoccidials, parasiticides for pets in the EEA/UK, including all the necessary assets such as applicable licenses, contracts, and brands, as well as relevant studies and data. The proposed divestment includes:

  • BAH’s Drontal and Profender brand-family products as well as related pipeline assets (endoparasiticides for pets) at EEA/UK level;
  • Elanco’s Osurnia (otitis treatment for pets) at global level;
  • Elanco’s Vecoxan (anticoccidials for ruminants) at global level.

The proposed commitments remove the entire overlaps between Elanco and BAH in the markets raising serious doubts and fully address all of the Commission’s competition concerns.

The Commission therefore concluded that the transaction, as modified by the commitments, would no longer raise competition concerns in the EEA. The decision is conditional upon full compliance with the commitments.

Companies and products

Elanco Animal Health Inc. is a US-based animal health company that develops, manufactures and markets products for pets and livestock worldwide. Formerly part of the US pharmaceutical group Eli Lilly, Elanco became a fully independent company in March 2019.

Bayer AG’s animal health division, controlled by Bayer AG of Germany, is active in the development, production and marketing of veterinary products for pets and livestock worldwide.

Merger control rules and procedures

The Transaction was notified to the Commission on 14 April 2020.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval or to start an in-depth investigation. This deadline is extended to 35 working days in cases where remedies are submitted by the parties, such as in this case.

More information will be available on the Commission’s competition website, in the Commission’s public case register under the case number M.9554.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Terrorism ‘spreading and destabilizing’ entire regions, Guterres warns States, at key Kenya conference

Here’s how we get businesses to harmonize on climate change

Drones are saving lives in Tanzania’s remote communities

Dignified health for all who live here

Austria, Italy, Portugal, Spain receive €279m after natural disasters in 2019

China, forever new adventures

A day that Berlin and Brussels would remember for a long time

I cycled over 6,000km across the United States to document climate change. Here’s what I learned

Climate action ‘both a priority and a driver of the decade’: Guterres

Antitrust: Commission consults stakeholders on guidance for national courts when handling disclosure information

No more lead in PVC to protect public health, say MEPs

Commission reviews relations with China, proposes 10 actions

Available mental health services: is it only about professionals or institutions?

UN rights experts ‘gravely’ concerned at spike in civilian casualties in north-west Myanmar following internet shutdown

COVID-19: Single market must emerge stronger from the crisis, say MEPs

Europe and the tragicomic ‘black sovranismo’

Humanitarian migration falls while labour and family migration rises

Facebook has built an AI-based tool that fixes the social network when it crashes

Africa’s future is innovation rather than industrialization

UN rights expert calls for civilian protection as fighting escalates between military and armed group

East Africa locusts threaten food insecurity across subregion, alerts UN agriculture agency

Migration crisis update: What are the chances of a fair deal at this EU Summit?

2021 EU budget must focus on supporting a sustainable recovery from the pandemic

David McAllister underlines the need for rapid progress in EU-UK negotiations

Prisons are failing. It’s time to find an alternative

This tool shows you which cities will flood as ice sheets melt

How to build a digital infrastructure that benefits emerging economies

A rapid deterioration of the humanitarian situation in the war-torn Yemen

Banking Union: ECOFIN and Parliament ready to compromise

4 ways family businesses can lead the pandemic recovery

Could electric vehicles pose a threat to our power systems?

GSMA Announces Final Event Lineup for Highly Anticipated 2019 “MWC Los Angeles, in Partnership with CTIA”

Summer 2018 Interim Economic Forecast: Resilient Growth amid increased uncertainty

“The winner is who can accelerate the transition to a new digital era”. The Sting reports live from EBS 2015: a Digital Europe 4.0

EU mobilises €21 million to support Palestine refugees via the UN Relief and Works Agency

EU: Divided they stand on immigration and Trump hurricanes

Under-fives’ daily screen time should be kept to 60 minutes only, warns WHO

Preventing the Pandemic of Mental Illness

COVID-19: Emerging technologies are now critical infrastructure – what that means for governance

Mario Draghi quizzed for last time by Economic and Monetary Affairs Committee

MEPs and European Youth Forum call on EU to Invest in Youth

EU to host international donors’ conference for Albania to help with reconstruction after earthquake

Manufacturing is finally entering a new era

Business could learn plenty about cybersecurity from the secret state

In Bali, UN chief Guterres outlines importance of international financial cooperation for sustainable development

Detecting online child sexual abuse requires strong safeguards

The ‘yellow vests’ undermined Macron in France and the EU

UN conference agrees better ways for Global South countries to work together on sustainable development

How India is solving its cooling challenge

Meet Alice, the battery-powered plane that could herald the age of electric air travel

Kids who live in the countryside have better motor skills, a study in Finland has found

Cohesion Policy after 2020: preparing the future of EU investments in health

MEPs demand an end to migrant deaths across the Mediterranean Sea

Search Engine neutrality in Europe in danger: Are 160.000 Google filtering requests good enough?

Our children’s career aspirations have nothing in common with the jobs of the future

World Editors Forum President: Credible media vital in the fight against COVID-19 and fake news epidemic

Coronavirus: here’s what you need to know about face masks

Donor countries set international standard for preventing sexual exploitation, abuse, and harassment in development sector

Can medical students be prepared for Global Health ethical issues?

Merkel refuses to consider the North-South schism of Eurozone

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s