GSK Plc, Pfizer Inc. and Haleon Plc — Combination C-2022/05/930

Notice under Section 6(2) of the Competition Act, 2002 given by GSK Plc, Pfizer Inc., and Haleon Plc

CORAM:

Mr. Ashok Kumar Gupta Chairperson

Ms. Sangeeta Verma Member

Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 25 May 2022, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), jointly given by GSK Plc (GSK), Pfizer Inc. (Pfizer) and Haleon Plc (Haleon) [Hereinafter, GSK, Pfizer and Haleon are collectively referred to as the Acquirers]. The notice was filed pursuant to the execution of a binding Implementation Agreement dated 25 May 2022 by and between the Acquirers (IA). The Acquirers also submitted certain additional information on 9 June 2022.

2. GSK is the ultimate holding company of the GSK group. GSK, registered in England and Wales, is a pharmaceuticals company active worldwide in the research, development, manufacturing and marketing of prescription pharmaceuticals, vaccines and consumer healthcare products.

3. Pfizer, incorporated in the United States of America, is a research-based biopharmaceutical company and is engaged globally in the research, development, manufacturing and marketing of pharmaceutical drugs.

4. Haleon is a newly incorporated overseas holding company (incorporated in and governed by the laws of the United Kingdom (UK)). Haleon’s entire shareholding is currently held by four individual shareholders, who are all presently GSK employees. Haleon currently does not hold shares in any entity and does not engage in any business activity. As submitted, post transaction, Haleon will be listed on: (i) the London Stock Exchange with respect to its ordinary shares and (ii) the New York Stock Exchange with respect to its ADSs. It will be the ultimate holding company of the respective legacy consumer healthcare business of GSK and Pfizer.

5. The proposed combination relates to corporate restructuring of GlaxoSmithKline Consumer Healthcare Holdings (No. 2) Limited (JVCO). JVCO was incorporated as a joint venture between GSK and Pfizer, with GSK/GSK affiliates (directly/indirectly) holding 68% shareholding in JVCO and Pfizer (indirectly) holding 32% (JVCO Transaction)1. The creation of JVCO involved bringing together certain consumer healthcare products of GSK and Pfizer into a new enterprise. GSK and Pfizer have been seeking to separate their consumer healthcare business and, as stated, the JVCO Transaction was a step in that direction. Post the formation of JVCO, JVCO proposed to acquire certain additional brands of GSK by way of acquisition of 100% shareholding in GlaxoSmithKline Asia Private Limited, along with the acquisition of certain other consumer brands from GlaxoSmithKline Pharmaceuticals Limited (GSKAPL Transaction) 2. As submitted, the proposed transaction is a culmination of 1 The creation of JVCO was notified to and approved by the Commission on 22 May 2019 (Combination Registration No. C-2019/06/654) 2 The GSKAPL Transaction was notified to and approved by the Commission on 20 January 2022 (Combination Registration No. C-2021/12/887). As submitted, GSKAPL Transaction is yet to be completed.

GSK’s intended objective of separation of its consumer healthcare business from the pharmaceuticals/vaccines business, ultimately publicly listing it on the UK bourses.

6. The proposed combination involves a demerger contemplated by GSK of JVCO and a series of share exchanges by Pfizer and GSK/GSK affiliates for shares in Haleon, pursuant to which, the entire shareholding of JVCO will be transferred to Haleon (which will indirectly hold 100% of the ordinary share capital of JVCO). Pursuant to the proposed transaction: (i) GSK, GSK affiliates and GSK’s shareholders (who currently, albeit indirectly, own 68% ordinary share capital of JVCO) will receive (together with GSK affiliates) 68% of the shares in Haleon, and (ii) Pfizer, which currently holds, indirectly, 32% of the ordinary share capital in JVCO (directly held through PF Consumer Healthcare Holdings LLC (PFCHH), a wholly owned indirect subsidiary of Pfizer) will receive 32% of the voting rights in Haleon (Proposed Combination).

7. JVCO carries out business activities in India through its (indirect) wholly owned subsidiary GlaxoSmithKline Consumer Private Limited (GSKCPL). Apart from this, there are no other business activities undertaken by JVCO (either directly or indirectly) in India. GSKCPL is engaged in the manufacture of drugs that provide relief from nasal congestion, cleaning and soothing of blocked nose and treatment of common cold and, as stated above, is in the process of completing the GSKAPL Transaction. GSKAPL is a consumer healthcare company that is involved in the marketing and distribution of OTC oral healthcare products under various brands such as Sensodyne, Parodontax, Polident, Iodex and Ostocalcium and OTC medicine products under brand names such as Crocin and ENO. The Acquirers have clarified that, further to the Proposed Transaction, no new products are sought to be added to JVCO, including in India, beyond the contribution of consumer healthcare products by GSK and Pfizer to JVCO, which were the subject of earlier transactions, namely, the JVCO Transaction and GSKAPL Transaction.

8. The Commission observed that, considering the nature of the Proposed Combination and the fact that there is no change in the product scope of JVCO pursuant to the Proposed Combination, the same is not likely to cause any significant change in competition dynamics.

9. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

10. The order may be revoked if, at any time, the information provided by the Acquirers is found to be incorrect.

11. The information provided by the Acquirers shall be treated as confidential in terms of and subject to the provisions of Section 57 of the Act.

12. The Secretary is directed to communicate to the Acquirers accordingly.