Novartis-GSK business deal gets CCI nod
23 December 2014
The Competition Commission of India (CCI) has approved a multi-billion dollar deal between global pharma giants GlaxoSmithKline Plc (GSK) and Novartis, as it did not find the transaction to be anti-competitive in India.
In its order dated 12 December, the fair trade watchdog said it is of the opinion that the "the proposed combination is not likely to have appreciable adverse effect on competition in India".
The three-part deal involves UK-based GSK acquiring the Swiss major's vaccine business and the latter purchasing GSK's cancer drugs portfolio, in a $16 billion deal.
The deal also involves purchase of the global human vaccines business of Novartis (excluding its influenza vaccines business) by GSK for an estimated of $7.1 billion.
Besides, the two drug majors have agreed to form a consumer healthcare joint venture in which GSK will own 63.5 per cent stake and Novartis the remaining 36.5 per cent.
GSK would contribute its global consumer health care business to the joint venture. This, however, would not include its consumer healthcare business in India.
Novartis will transfer its over-the-counter consumer healthcare business to the JV except for its products that are managed by and reported for financial purposes within Novartis' pharmaceutical division, Alcon division and Sandoz division.
CCI said "the negligible presence" of GSK and Novartis and "the presence of significant competitors, the vaccines transaction is not likely to result in appreciable adverse effect on competition in the market in India".
The regulator also observed that the presence of significant competitors in consumer healthcare segment does not cause concerns in relation to the proposed JV.
For the cancer drug portfolio, CCI observed that "there are no overlaps between the pipeline oncology products of the parties".
In India, GSK has been active through its various subsidiaries like Biddle Sawyer, GSK Asia, GSK Consumer Healthcare and GSK Pharmaceuticals.
Novartis is present in India through four entities - Novartis India, Novartis Healthcare, Sandoz Private Ltd and Chiron-Behring Vaccine Private Ltd.