Glaxo Wellcome Plc and Another v Competition Commission of South Africa [2000] ZACT 33 (28 July 2000)

Glaxo Wellcome Plc and Another v Competition Commission of South Africa [2000] ZACT 33 (28 July 2000)

The Tribunal found that the merger would result in high combined market shares in three therapeutic categories: anti-virals (excluding anti-HIV), topical anti-biotics, and anti-emetics. To address competition concerns, the merging parties voluntarily undertook to out license specific products in each category, ensuring that the merged entity would inherit only one party's market share in those markets. The Tribunal accepted these undertakings as sufficient to mitigate anti-competitive effects. Public interest concerns raised by the Treatment Action Campaign regarding HIV/AIDS medicines were investigated, but no product overlap was found in the HIV anti-retrovirals category, and the only...

Citation
[2000] ZACT 33
Parties
Applicant: Glaxo Wellcome plc; Applicant: SmithKline Beecham plc; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
28 July 2000
Case Number
58/AM/May00
Procedural Posture
Merger Approval / Final Determination
Outcome
Merger approved subject to conditions.
Judges
N.M. Manoim, D.H. Lewis, U. Bhoola
Legal Topics
Intermediate Merger, Market Share Analysis, Out Licensing Conditions, Public Interest Considerations, Product Market Definition
Competition Law Commercial and Corporate Intermediate Merger Market Share Analysis Out Licensing Conditions Public Interest Considerations Product Market Definition

Case Brief

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Parties

Glaxo Wellcome plc

Applicant

SmithKline Beecham plc

Applicant

Competition Commission

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between Glaxo Wellcome plc and SmithKline Beecham plc would substantially lessen or prevent competition in identified pharmaceutical therapeutic categories.
  2. 2 Whether the merger should be approved subject to conditions addressing competition concerns in specific markets.
  3. 3 Whether public interest considerations, including the impact on HIV/AIDS treatment and employment, warrant additional conditions.

Ratio Decidendi

The Tribunal found that the merger would result in high combined market shares in three therapeutic categories: anti-virals (excluding anti-HIV), topical anti-biotics, and anti-emetics. To address competition concerns, the merging parties voluntarily undertook to out license specific products in each category, ensuring that the merged entity would inherit only one party's market share in those markets. The Tribunal accepted these undertakings as sufficient to mitigate anti-competitive effects. Public interest concerns raised by the Treatment Action Campaign regarding HIV/AIDS medicines were investigated, but no product overlap was found in the HIV anti-retrovirals category, and the only...

Court Disposition

Merger approved subject to conditions.

Orders

  • The merger between Glaxo Wellcome plc and SmithKline Beecham plc is approved subject to the condition that the merging parties out license the following products in the identified therapeutic categories: Granisetron (Kytril) in anti-emetics (A4A); Polysporin, Cicatrin, and Neosporin in topical anti-biotics (D6A);...
  • Drafts of the terms of these license conditions are attached as Appendixes A, B, and C.