Aspen Pharmacare Holdings Ltd v Fine Chemicals Corporation (Pty) Ltd (127/LM/Dec08) [2009] ZACT 31; [2009] 1 CPLR 115 (CT) (12 May 2009)

Aspen Pharmacare Holdings Ltd v Fine Chemicals Corporation (Pty) Ltd (127/LM/Dec08) [2009] ZACT 31; [2009] 1 CPLR 115 (CT) (12 May 2009)

The Tribunal found that although Aspen's acquisition of sole control over Fine Chemicals would place a key input supplier in the hands of a downstream competitor, several mitigating factors prevent substantial anti-competitive effects. Import competition in final pharmaceutical products, significant regulatory price controls downstream, and the fact that the monopoly in narcotic APIs is a result of public policy and licensing, all serve to limit Aspen's ability and incentive to foreclose rivals or engage in monopoly pricing. The Commission's investigation confirmed that Aspen is not dominant in downstream markets and that imports provide effective competitive discipline. No public...

Citation
[2009] ZACT 31
Parties
Applicant: Aspen Pharmacare Holdings Limited; Respondent: Fine Chemicals Corporation (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 May 2009
Case Number
127/LM/Dec08
Procedural Posture
Merger Application / Tribunal Approval and Reasons
Outcome
Merger approved; the transaction is unlikely to substantially prevent or lessen competition in any relevant market and raises no public interest concerns.
Judges
D Lewis, N Manoim, Y Carrim
Legal Topics
Merger Control, Vertical Integration, Foreclosure, Monopoly Pricing, Barriers to Entry
Competition Law Commercial and Corporate Merger Control Vertical Integration Foreclosure Monopoly Pricing Barriers to Entry

Case Brief

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Parties

Aspen Pharmacare Holdings Limited

Applicant

Fine Chemicals Corporation (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval and Reasons

Legal Issues

  1. 1 Does the acquisition of sole control by Aspen over Fine Chemicals substantially prevent or lessen competition in any relevant market?
  2. 2 Will the merger result in foreclosure of Aspen's downstream rivals through control of key inputs?
  3. 3 Will the merger enable monopoly pricing in the upstream market for narcotic APIs?

Ratio Decidendi

The Tribunal found that although Aspen's acquisition of sole control over Fine Chemicals would place a key input supplier in the hands of a downstream competitor, several mitigating factors prevent substantial anti-competitive effects. Import competition in final pharmaceutical products, significant regulatory price controls downstream, and the fact that the monopoly in narcotic APIs is a result of public policy and licensing, all serve to limit Aspen's ability and incentive to foreclose rivals or engage in monopoly pricing. The Commission's investigation confirmed that Aspen is not dominant in downstream markets and that imports provide effective competitive discipline. No public...

Court Disposition

Merger approved; the transaction is unlikely to substantially prevent or lessen competition in any relevant market and raises no public interest concerns.

Orders

  • The acquisition by Aspen Pharmacare Holdings Limited of the remaining shares in Fine Chemicals Corporation (Pty) Ltd is approved without conditions.