Mylan-Abbott deal gets CCI green signal

Global drug majors Mylan and Abbott's proposed deal in the pharmaceutical products segment has received the green signal from the Competition Commission of India.
Under the deal, Abbott Laboratories' Established Pharmaceuticals Products (EPP) segment would be transferred to the Netherlands-based New Moon BV -- a private limited liability company set up by Mylan for the proposed combination.
Healthcare major Abbott's EPP segment includes branded generics and speciality pharmaceuticals products business of Abbott in Europe, Japan, Australia, New Zealand and Canada.
In an order released today, the Competition Commission of India (CCI) said that "the proposed combination is not likely to have an appreciable adverse effect on competition in India".

The fair trade regulator observed that "there is horizontal overlap" between the pharmaceutical products of Mylan and Abbott in India with respect to certain molecules.
"However, it is observed that in all of the...Overlapping molecules, the combined market share of Mylan and Abbott is between [6-10] per cent and the incremental market share is between [0-5] per cent," CCI said.

"Accordingly, it is observed that the horizontal overlap between the pharmaceutical products of Mylan and Abbott in India is insignificant to raise any competition concern in India," it added.
Further, CCI, among others, also noted that "there is no vertical relationship between the Abbott and Mylan in India".

As per the details given in the order, in consideration for transfer of EPP segment, Abbott was to acquire about 21 per cent stake in New Moon.
Further, to effectuate the said transaction, arm of New Moon, Moon of PA Inc -- formed for the purpose of consummating the proposed combination -- would merge into Mylan, with Mylan being the surviving entity.
This merger would result in cancellation of Mylan's common stock and New Moon would issue its shares to the former shareholders of Mylan.
Consequently, New Moon would become the parent company of Mylan, the order said.
New Moon, Abbott and Mylan had entered into agreement related to the deal in July, this year, following which they had filed a notice with CCI in August seeking the regulator's approval.