ICU Medical, Inc., USA — Combination C-2016/10/450
- Case No.C-2016/10/450
Ratio decidendi
The rule this decision rests on
A proposed combination that gives rise to no horizontal overlap in India, because the acquirer's presence in the target's business is negligible and the acquirer is not active in that business in India, and no vertical overlap, because the parties operate in no vertically related markets, is not likely to cause an appreciable adverse effect on competition in India and may be approved under section 31(1). Where the parties to a combination are not engaged in vertically related markets, there is no vertical overlap between them, and that absence is a factor in the assessment of whether the combination is likely to cause an appreciable adverse effect on competition under section 20(4). Approval under section 31(1) rests on the Commission's opinion, formed on the notice and on the factors in section 20(4), that the combination is not likely to have an appreciable adverse effect on competition in India. The approval is conditional on the information furnished by the parties being correct, failing which the order is liable to revocation.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Legal Representative of the Parties: Chandiok & Associates, New Delhi
Order under sub-section 31 (1) of the Competition Act, 2002
1. On 24th October 2016, the Competition Commission of India (“Commission”) received a notice given by ICU Medical, Inc. (“ICU”) under sub-section (2) of section 6 of the Competition Act, 2002 (“Act” ).
2. The proposed combination envisages ICU’s acquisition of Pfizer Inc.’s (Pfizer”) HIS Business (Hospira Infusions Systems) comprising of manufacture and sale of medical devices used in infusion therapy business by wholly acquiring the shares of certain enterprises belonging to the Pfizer group and by acquiring assets from certain enterprises belonging to the Pfizer group (to the extent they relate to the HIS Business). (“Proposed Combination”). Further Pfizer shall acquire shares representing 16.6% of the common stock of ICU. It is stated that post the For Greater Good Proposed Combination, Pfizer will exit the infusion therapy business. Herein after, ICU and Pfizer have been referred to as “Parties”.
3. As stated in the notice, globally, ICU is active in development, manufacture and sale of products in areas such as infusion therapy products i.e. (i) products used to administer fluids or medication directly into the patient’s vein; (ii) critical care products i.e. products used to monitor vital signs as well as specific physiological functions of key organ systems; and (iii) oncology products i.e products that are used to prepare and deliver hazardous medications such as those used in chemotherapy. In India, ICU makes minimal sales of certain infusion products and oncology products through import.
4. As stated in the notice, Pfizer is globally active in primary care that includes prescription pharmaceutical product in the therapeutic and disease areas of Alzheimer’s disease; specialty care that includes products primarily prescribed by pharmacists who are specialists in the therapeutic and disease areas; oncology products that include products addressing oncology and oncology-related illness; and consumer healthcare that includes non-prescription products in therapeutic categories and infusion system. In India, Pfizer is present in pharmaceutical products through its various subsidiaries, including in the areas of primary care, specialty and oncology, and consumer health. It is stated in the notice that no products related to infusion systems (including HIS Business) are manufactured or sold by Pfizer in India.
5. The Commission observed that Pfizer is not active in India with respect to HIS business and ICU, owing to its limited sales, does not have any substantial presence in India. Thus, the Parties do not have any horizontal overlap in India.
6. The Commission also observed that the Parties to the proposed combination are not engaged in any business activities in vertically related markets. Thus, there is also no vertical overlap between the Parties in India.
For Greater Good 7. Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and assessment on the basis of factors stated in sub-section (4) of Section 20 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 and therefore, the Commission, approved the same under sub-section (1) of Section 31 of the Act.
8. The order shall stand revoked, if, at any time, the information provided by the Parties is found to be incorrect.
9. The information provided by the Parties is confidential at this stage in terms of and subject to the provisions of Section 57 of the Act.
10. The Secretary is directed to communicate to the Parties accordingly.
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