Jurisdiction - India
India – CCI Approves Novartis-Glaxo Merger Of Certain Business Portfolios.

16 February, 2015


On December 12, 2014, CCI approved the proposed combination between GlaxoSmithKline Plc (‘GSK’) and Novartis AG (‘Novartis’) (collectively referred to as ‘Parties’). The combination related to three inter-conditional and inter-dependent transactions, (i) acquisition of global human vaccine business of Novartis by GSK (‘Vaccine Transaction’); (ii) formation of consumer healthcare joint venture, in which GSK would own 63.5% and Novartis, would own remaining 36.5% equity interest (‘Consumer Healthcare Transaction’); and (iii) acquisition of GSK business relating to portfolio of oncology products by Novartis (‘Oncology Transaction’).


GSK is active in three primary areas, namely, pharmaceuticals, vaccines and consumer healthcare and has presence in India through various subsidiaries. Novartis, in addition to above three areas is also active in eye care, generics and animal health segments in India.


The Parties entered into three separate agreements with an overarching implementation agreement. Further, the Parties had submitted that while the proposed combination would be terminated if any of the three individual transaction got terminated, each transaction was separate and complete in itself.


i. Vaccines Transaction: CCI observed that there was overlap only for DTP vaccines and due to presence of other significant players in the market; this transaction was not likely to result in an Adverse Effect in India. Therefore, CCI preferred to leave the exact market delineation open. The horizontal overlap between the existing and pipeline products of Parties was not likely to result in Adverse Effect. In case of vertical integration, CCI noted that post combination, GSK would be integrated upstream without resulting in any vertical foreclosure in India.


ii. Consumer Healthcare Transaction: This transaction broadly included (a) OTC Products and (b) other healthcare products. The Parties had overlapping products in six segments. However, CCI observed that in none of these segments the combined shares of the Parties was more than 10%. CCI noted the possibility of horizontal overlap in existing and pipeline products of the Parties in Consumer Healthcare Transaction. However considering negligible presence of Parties and presence of significant competitors in product market, this transaction was not likely to result in Adverse Effect in India.


iii. Oncology Transaction: Pursuant to this transaction, Novartis sought to acquire eleven existing and two pipeline oncology products of GSK. CCI observed that there was no overlap between existing oncology products of Novartis and oncology products being acquired by Novartis from GSK in India. Similarly no overlap was found between the pipeline oncology products of the Parties. Since this transaction did not raise competition concerns, CCI left exact market delineation open.


Accordingly, CCI approved the proposed transaction, observing that it was not likely to cause an Adverse Effect in India.




For further information, please contact:


Zia Mody, AZB & Partners
[email protected]


Abhijit Joshi, AZB & Partners 
[email protected]

Shuva Mandal, AZB & Partners 
[email protected]


Samir Gandhi, AZB & Partners
[email protected]

Percy Billimoria, AZB & Partners 
[email protected]


Aditya Bhat, AZB & Partners 
[email protected]

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