The Australian Competition and Consumer Commission will undertake market inquiries on a divestiture proposal offered by Johnson & Johnson to address the ACCC's preliminary competition concerns arising from its proposed acquisition of the consumer healthcare business of Pfizer Inc., ACCC Chairman, Mr Graeme Samuel, said today.
"The proposal contemplates the divestment of J&J's Vermox brand in the worm treatments product category, and Pfizer's anti-diarrhoeals brands Lomotil and Lofenoxal", Mr Samuel said. "If required, J&J proposes to also assist the proposed purchaser/s of these divested brands to secure a source of supply of the products corresponding with these brands.
"The ACCC is also in discussions with Pfizer about the assistance the proposed purchaser/s of Pfizer's anti-diarrhoeal brands may require from Pfizer to ensure a source of supply of the products corresponding with these brands.
"J&J also proposes to divest part or all of its global supply business of nicotine replacement therapy products, including, if required, the manufacturing assets of this business", Mr Samuel said. To achieve this divestiture, J&J proposes that the commitments it has made to the European Commission in respect of its NRT business will be incorporated in its divestiture proposal to the ACCC.
"The ACCC has not formed a view on J&J's divestiture proposal, whether on a preliminary, confidential or any other basis. The ACCC will consider whether the divestiture proposal would ensure that the proposed acquisition does not substantially lessen competition, and make a decision as to whether to accept or reject the divestiture proposal in due course.
"In making its decision the ACCC will take into account information from market participants. Therefore, the ACCC is now consulting market participants in relation to the divestiture proposal. Following its market inquiries, the ACCC may decide to accept the divestiture proposal in part or in whole, or reject it and make a final decision opposing the proposed acquisition".
The ACCC invites submissions from interested parties in relation to the divestiture proposal, which incorporates the EC commitments. The closing date for making submissions is 1 p.m.on Friday 15 December 2006.
The divestiture proposal is offered by J&J pursuant to section 87B of the Trade Practices Act 1974. The proposed section 87B undertaking will be available shortly on the ACCC's website, by following the Mergers link to the Mergers Public Register. The main issues that the ACCC will be considering in relation to the divestiture proposal are identified in an open letter to interested parties which will be published on the ACCC's website.
The ACCC anticipates issuing its final decision in relation to the proposed acquisition by 20 December 2006.