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    MAO Case No. M-2019-005

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    Jay
    This document summarizes a case from the MAO regarding the proposed acquisition of Pfizer Inc.'s consumer healthcare business by GlaxoSmithKline Consumer Healthcare Holdings, Ltd. Specifically: - GSK CH seeks to acquire Pfizer CH, while Pfizer will retain a 32% minority stake in the merged entity. The relevant markets are adult cough medicines, analgesics, and pediatric health products. - The MAO found that the merged entity was unlikely to gain the ability to unilaterally raise prices or reduce innovation. It also found no evidence of potential tying/bundling issues due to different product prescriptions and countervailing buyer power. - Coordinated effects were deemed unlikely due to

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    MAO Case No. M-2019-005

    Uploaded by

    Jay
    102 views1 page
    This document summarizes a case from the MAO regarding the proposed acquisition of Pfizer Inc.'s consumer healthcare business by GlaxoSmithKline Consumer Healthcare Holdings, Ltd. Specifically: - GSK CH seeks to acquire Pfizer CH, while Pfizer will retain a 32% minority stake in the merged entity. The relevant markets are adult cough medicines, analgesics, and pediatric health products. - The MAO found that the merged entity was unlikely to gain the ability to unilaterally raise prices or reduce innovation. It also found no evidence of potential tying/bundling issues due to different product prescriptions and countervailing buyer power. - Coordinated effects were deemed unlikely due to

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    This document summarizes a case from the MAO regarding the proposed acquisition of Pfizer Inc.'s consumer healthcare business by GlaxoSmithKline Consumer Healthcare Holdings, Ltd. Specifically: - GSK CH seeks to acquire Pfizer CH, while Pfizer will retain a 32% minority stake in the merged entity. The relevant markets are adult cough medicines, analgesics, and pediatric health products. - The MAO found that the merged entity was unlikely to gain the ability to unilaterally raise prices or reduce innovation. It also found no evidence of potential tying/bundling issues due to different product prescriptions and countervailing buyer power. - Coordinated effects were deemed unlikely due to

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    102 views1 page

    MAO Case No. M-2019-005

    Uploaded by

    Jay
    This document summarizes a case from the MAO regarding the proposed acquisition of Pfizer Inc.'s consumer healthcare business by GlaxoSmithKline Consumer Healthcare Holdings, Ltd. Specifically: - GSK CH seeks to acquire Pfizer CH, while Pfizer will retain a 32% minority stake in the merged entity. The relevant markets are adult cough medicines, analgesics, and pediatric health products. - The MAO found that the merged entity was unlikely to gain the ability to unilaterally raise prices or reduce innovation. It also found no evidence of potential tying/bundling issues due to different product prescriptions and countervailing buyer power. - Coordinated effects were deemed unlikely due to

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    MAO Case No.

    M-2019-005

    In the Matter of the Proposed Acquisition by GlaxoSmithKline Consumer Healthcare


    Holdings, Ltd. Of Pfizer Inc.’s Consumer Healthcare Business

    Facts:

    GSK CH, the acquiring entity, is indirect subsidy of GlaxoSmithKline Plc. GSK is a multinational
    pharmaceutical company based in UK. GSK and its subsidiaries GSK Group operate in multiple
    business segments including pharmaceuticals, vaccines and consumer healthcare.

    Pfizer CH is the acquired business. Its parent entity is Pfizer which is a US based multinational
    corporation organized into two business segments: innovative health and essential health.
    Pfizer CH operates under essential health business segment. Pfizer Philippines is the sole
    subsidiary of Pfizer in the Philippines that carries out Pfizer CH’s local business.

    Pfizer CH, Pfizer, Inc. will obtain non-controlling shares representing 32% ownership interest in
    GSK CH.
    The relevant markets: adult cough medicines, analgesics, pediatric health products.

    Issue: WON the transaction substantially prevents, restricts, or lessen competition.

    Held:

    Unilateral effects
    The merged entity will gain limited ability to exercise market power and the proposed
    transaction will not increase the incentive of the merged firm to unilaterally raise price.

    The commission finds that the merged entity will not likely to reduce innovation in the Relevant
    Markets.

    Tying and bundling


    There is different prescriptions with the products. There also exist countervailing buyer power
    from the retailer.

    Coordinated effects
    The countervailing buyer power of the distributors and retailers may constrain or undermine
    coordination in the relevant markets.

    Countervailing buyer Power


    There is a strong countervailing buyer power coming from both distributor and retailers to
    constrain the merged entity’s exercise of market power.

    Barriers to entry
    CH products are generally off patent and lack any restrictions in advertising. Existing players
    can develop a new product easily in the market.

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