CELEX: 32014M7277
Language: en
Date: 2014-10-03 00:00:00
Title: Commission Decision of 03/10/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7277 - ELI LILLY / NOVARTIS ANIMAL HEALTH) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 3.10.2014
C(2014) 7228 final

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|To the notifying party:                                                |

Dear Sir / Madam,

Subject:    Case M.7277 – Eli Lilly/ Novartis Animal Health
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139 / 2004[1]

   1) On 29 August 2014, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation  (EC)  No
      139/2004 by which the undertaking Eli Lilly and Company ("Eli Lilly", United States) acquires within the meaning of Article 3(1)(b) of  the
      Merger Regulation control of the whole of the undertaking Novartis Animal Health ("NAH", Switzerland) by way  of  purchase  of  shares  and
      assets.[2] Eli Lilly and NAH are collectively referred to as the "Parties".

       THE PARTIES

   2) Eli Lilly is a publicly listed company whose common stock is traded on the New  York  Stock  Exchange.  It  is  active  in  the  discovery,
      development, manufacture and sale of a range of pharmaceutical products for humans and animals. The main areas in which it is  active  are:
      neuroscience, endocrinology, oncology, cardiovascular, animal health, and the treatment of staphylococcal and bacterial infections.

   3) NAH is a publicly listed company whose common stock is traded on the New York and the Swiss Stock Exchanges. It is active in the discovery,
      manufacturing, development and sale of animal health products to prevent and treat diseases in companion animals,  production  animals  and
      farmed fish.

       THE OPERATION

   4) The transaction consists of the acquisition of sole control over NAH by Eli Lilly, via a stock and asset purchase agreement dated April 22,
      2014. The business will be integrated into Eli Lilly’s animal health business, Elanco Animal Health (“Elanco”).

   5) Consequently, the Transaction constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

   6) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 2 500 million [Eli Lilly EUR […]; NAH  EUR  […]].
      In each of at least three Member States, the combined aggregate turnover is more than EUR 100 million [in the United Kingdom: Eli Lilly EUR
      […]; NAH EUR […]; in Germany: Eli Lilly EUR […]; NAH EUR […]; in France: Eli Lilly EUR […]; NAH EUR […]]. Finally, the aggregate Community-
      wide turnover of each of them is more than EUR 100 million [Eli Lilly EUR […]; NAH EUR […]]. Neither of them achieves more than  two-thirds
      of their aggregate EU-wide turnover in one and the same Member State.

   7) The notified operation therefore has an EU dimension within the meaning of Article 1(3) of the Merger Regulation.

       COMPETITIVE ASSESSMENT

1 Product market definition

1 Introduction

   8) Like the human health industry, the animal health industry is heavily regulated at the EEA and national level.  Veterinary products  cannot
      be marketed in the EEA without a prior marketing authorisation. The commercialisation of animal health pharmaceuticals in the EEA  requires
      obtainment of a marketing authorisation.  Depending on the type of the product, marketing authorisations for animal health products in  the
      EEA can be obtained centrally from the EMA or nationally from the competent authorities in each Member  State  through  the  decentralised,
      mutual recognition or the national procedures.

   9) Generics are the identical copies of the innovative treatments which enter the market after the patent protections afforded to the original
      developer have expired. Generic producers are only required to demonstrate that their product is  an  identical  version  of  the  original
      product in respect to composition (same qualitative and quantitative composition in  active  substances)  and  the  formulation  (the  same
      pharmaceutical form), so as to demonstrate bioequivalence with the reference product.  Therefore, generics are assumed to be  identical  in
      dose, strength, route of administration, safety, efficacy and intended use and can be launched as soon as the original product become  off-
      patent. Most of the products in the affected markets are off-patent.

  10) There are significant barriers to entry in the animal health markets, with varying degrees on a case by case basis.  A distinction  can  be
      made between barriers to entry into a new product market and barriers to geographic entry (entry with an existing  and  already  registered
      product in a new geographic market).  Barriers vary depending on the markets concerned (size of the market,  demand  for  the  product  and
      expected evolution, competitive environment).

  11) In animal health cases, the Commission factored into its competition assessment pipeline products in full development stage.[3]  Therefore,
      also in this case, the Commission has taken into account the pipeline products of the Parties which reached this development phase.

  12) In previous cases, the Commission has divided animal health products into three  core  areas,  namely:  (i)  biologicals  (vaccines);  (ii)
      pharmaceuticals; and (iii) medicinal feed additives.[4] In the present case, the Parties' activities overlap only in pharmaceuticals.

  13) Pharmaceuticals encompass a wide group of products that contain a variety of active substances to prevent or treat a large range of  animal
      diseases and disorders. In its previous decisions, the Commission considered that pharmaceuticals for animal usage  should  be  split  into
      parasiticides, antimicrobials, endocrine treatments, anti-inflammation and analgesic pharmaceuticals.[5]

  14) Furthermore, the Commission considered that the most important factors to be taken into account when defining relevant product  markets  in
      the area of animal health pharmaceuticals are the following:[6]

        (i.) Animal species: Although many pharmaceuticals are multi-species, some are effective only  for  a  particular  species  or  group  of
        species (such as companion animals). In this regard the Commission has considered that animal health products are mainly produced for the
        following main groups of animals:[7] (a) Ruminants (cattle, sheep and goats); (b) Swine; (c) Poultry (chickens and turkeys);  (d)  Equine
        (horses); (e) Companion animals (cats and dogs) and (f) Aquaculture animals (farmed fish).[8]

        (ii.) Active ingredient: In some cases the active substance  is  the  main  determinant  for  the  product  market  definition,  e.g.  in
        antibiotics, because the same active substance is effective against the whole range of pathologies.

        (iii.) Target pathology / scope of effectiveness: Pathology is often at the core of the market definition. However, in some instances  it
        is impossible to limit market demarcation to very narrowly defined pathologies.

        (iv.) Mode of administration: Most animal health pharmaceuticals are  injectable  (especially  for  production  animals).  For  companion
        animals a large number of pharmaceuticals are administered orally (tablets, pastes and granules). There is a large number  of  additional
        modes of administration such as intra-mammary products for mastitis treatment in  cows,  anti-parasitic  collars  or  spot-on  drops  for
        companion animals, etc.

        (v.) Duration of efficacy: Farmers may demand products that remain active for long periods of time, usually for preventive purposes, e.g.
        anti-parasitic products or long-acting preventive antibiotics.

        (vi.) Duration of the withdrawal period: For production animals, the withdrawal period - i.e. the period after treatment during which  an
        animal's meat or milk is deemed unsuitable for human consumption – is of large economic importance.

  15) In the present case, the Parties' activities overlap in parasiticides and antimicrobials for both companion animals and production  animals
      (comprising ruminants, swine, and poultry).

2 Parasiticides for companion animals

  16) Parasiticides are used to kill or prevent parasites from infesting the animal, whether internally (e.g. worms) or on the body  (e.g.  fleas
      and ticks). Within parasiticides, there are different products against multi-celled parasites (such as fleas and worms) and  anti-coccidial
      treatments which act against single celled parasites. As the Parties are not active in anti-coccidials, this segment will  not  be  further
      considered.

  17) As regards multi-celled parasiticides, the Commission previously considered three main types of parasiticides: (i) ectoparasiticides,  used
      to control external parasites such as fleas, ticks, etc, (ii) endoparasiticides,  used  to  control  internal  parasites  such  as  gastro-
      intestinal roundworms and tapeworms, lungworms, liver flukes, protozoa, etc. and (iii)  endectocides,  used  to  treat  both  external  and
      internal parasites.[9] In Schering Plough / Organon Biosciences,[10] the Commission analysed a possible alternative market comprising  both
      endectocides and endoparasiticides. Also, in Pfizer / Wyeth[11], the Commission analysed endoparasiticides and  endectocides  together  but
      also separately, as the market investigation in that case indicated that these two segments are not  always  substitutable.  In  all  these
      decisions the Commission left the market definition for parasiticides open.

  18) The Commission has so far not further segmented the market based on  species  (except  for  horses)  mode  of  administration,  disease  or
      distribution method for these three markets. However, in Pfizer / Wyeth, the market investigation showed that products for the treatment of
      heartworms are not substitutable with products that treat other internal parasites such as gastro-intestinal parasites and  the  Commission
      considered heartworm as a separate segment[12] but ultimately left the market definition open.

1 The views of the Notifying Party

  19) The Notifying Party submits that endectocides compete with both endoparasiticides and ectoparasiticides as they combine active  ingredients
      for both internal and external parasites and are equally effective.  Moreover,  the  Notifying  Party  considers  that  the  price  of  the
      endectocides is not significantly higher than the price of single molecule products. On the supply side, the Notifying Party  submits  that
      there is significant substitution between endectocides on the one hand and ectoparasiticides and endoparasiticides on the other side as the
      endectocides combine the active ingredients of them both. Additionally, all major suppliers produce all three types of parasiticides.

  20) The Notifying Party considers that any further segmentation of the parasiticides market for companion animals  would  not  be  appropriate.
      However, it recognises that heartworm is a serious concern for certain southern European countries (mainly Italy, Spain and  Portugal)  and
      has become widely recognised as such. Nevertheless, it argues that there is no reason to consider that  heartworm  constitutes  a  separate
      market.

  21) As regards the difference in the distribution method, the Notifying Party submits that  both  the  vet  channel  and  the  over-the-counter
      ("OTC") channels impose competitive constraints on each other and therefore one single market should be considered.

  22) Additionally, in relation to  the  mode  of  administration,  the  Notifying  Party  submits  that  segmenting  parasiticides  by  mode  of
      administration would not be in line with the Commission’s decisional practice which has considered that the various modes of administration
      in parasiticides for companion animals are interchangeable and thus compete with each other.

2 The results of the market investigation and the Commission's assessment

  23) As regards substitutability between ectoparasiticides, endoparasiticides and endectocides, the results of  the  market  investigation  were
      mixed and revealed that it depends very much on the customers' preferences, the disease and the particular characteristics of  the  animals
      that are being treated.[13] From the demand side, the customers' participating in the market investigation submitted that  they  would  not
      switch from endoparasiticides or ectoparasiticides products to endectocides products as a reaction to a permanent price increase of 10%  of
      the former ones.[14] However, customers who want to treat both internal and external parasites at the same time  would  choose  a  combined
      active ingredient product (endectocide).

  24) There is therefore a certain degree of substitution between ecto / endecto products and between endo / endecto products that the Commission
      will take into account in the competitive assessment. However, in this specific case  the  market  definition  can  be  left  open  as  the
      transaction does not give raise to competition concerns neither in the segments of ectoparasiticides, endoparasiticides  and  endectocides,
      nor in the hypothetical segments comprising endo / endecto parasiticides and ecto / endecto parasiticides.

  25) As regards other alternative market definitions, a large majority of respondents to the market investigation submitted that,  similarly  to
      the Notifying Party's views, the channel of distribution (OTC or vet channel) plays a role only from a marketing strategy's point of  view,
      rather than from a competitive point of view.[15] Based on these results, the Commission concludes that the OTC and the vet channels do not
      constitute separate segments.

  26) As regards heartworms, the majority of the respondents to the market investigation submitted that there is a separate market for  heartworm
      products, including both treatment and prevention products.[16] This is due to the fact heartworm is an endoparasitic worm  that  primarily
      resides in the heart of dogs (and to a lesser extent of cats) and cannot be treated with intestinal tablets used to treat  other  types  of
      worms. This creates the need for specific treatment.[17] The Commission considers, based on the results of the market  investigation,  that
      heartworm products constitute a separate market.

  27) As regards a possible segmentation of parasiticides  between  injectable,  topical  and  oral  products,  the  respondents  to  the  market
      investigation indicated that the distinction between oral / topical on  the  one  side  and  injectable  products  on  the  other  side  is
      particularly relevant for ecto / endecto products. One supplier mentioned that "oral and topical products are usually administered  by  pet
      owners, whereas injectable products are usually  administered  by  veterinarians"  and  that  "twice-a-year  injection  administered  by  a
      veterinarian is a very different prospect than a monthly owner-administered treatment".[18] Therefore, oral  and  topical  ecto  /  endecto
      products could constitute a separate segment altogether.[19] The Commission will take into consideration such a  possible  segmentation  in
      the competitive assessment. However, in this specific case the market definition can be left open as the transaction does not give rise  to
      competition under any plausible product market definition.

3 Conclusion

  28) In the present case, the Commission considers that heartworm products constitute a separate market.  As  regards  other  parasiticides  for
      companion animals, the precise market definition can be left open in this specific case as the proposed transaction does not raise  serious
      doubts as to its compatibility with the internal market with respect to any plausible product market definition.

3 Otitis externa for companion animals

  29) Otitis extern is an inflammation of the external ear canal. It is not a disease in itself but rather a symptom of some other diseases, such
      as an infection.

  30) According to the Commission’s past decisional practice,[20] otitis pharmaceuticals are considered as a separate market.

1 The views of the Notifying Party

  31) The Notifying Party agrees with the product market definition previously defined by the Commission, namely that otitis externa  constitutes
      a separate market, without the need to further segment it based on any other criteria.

2 The results of the market investigation and the Commission's assessment

  32) Based on the fact that products that treat otitis externa have very specific indications and formulations compared  to  products  indicated
      for general or skin infections, the respondent suppliers to the market investigation submitted that otitis externa is a separate market, as
      previously defined by the Commission.[21]

  33) As regards the mode of administration, the respondents to the market investigation have also submitted that the otitis  externa  market  is
      mainly a topical market and that oral and injectable products are rarely used.[22] In the present case, whether the market can be segmented
      by mode of administration is a question that can be left open as the  proposed  transaction  does  not  raise  serious  doubts  as  to  its
      compatibility with the internal market with respect to any plausible product market definition.

3 Conclusion

  34) In the present case the precise product market definition for otitis externa can be left open as the proposed transaction  does  not  raise
      serious doubts as to its compatibility with the internal market with respect to any plausible product market definition.

4 Antimicrobials for production animals

  35) Antimicrobials are pharmaceutical products that destroy or prevent the growth of microbes such  as  bacteria,  mycoplasma  (pathogens  that
      clack cell walls) or fungi and thus treat diseases associated with them.

  36) In previous decisions,[23] the Commission considered that the market definition of antimicrobials has been  driven  by:  (i)  the  mode  of
      administration (ii) the chemical class and (iii) the animal's size. As regards the mode of administration, the Commission has in  the  past
      recognised that, based on the market investigation results in those cases, there  is  limited  substitution  between  injectable  and  oral
      products as they are used for different situations, in different ways.[24] In relation to the chemical class, the following main categories
      were singled out: sulphanomides, penicillins, cephalosporins, tetracyclines, etc. Finally, in relation to the size of the animals or animal
      species, the Commission has analysed this market based on a separation between large animals, comprising production animals  and  companion
      animals (without any further segmentation by particular species).[25]

1 The views of the Notifying Party

  37) The Notifying Party submits that there is no need to further segment the market for antimicrobials  based  on  mode  of  administration  as
      farmers can use all products interchangeably. Furthermore, the Notifying Party indicates that Parties' products each have several modes  of
      administration. Likewise, a further distinction based on species of production animals is not relevant, as most of the  antimicrobials,  in
      particular those administered orally, are indicated for a wide variety of species. However, the Notifying Party has provided data for  each
      species separately and for each different administration mode.

  38) The results of the market investigation and the Commission's assessment

  39) Based on the market investigation results, the Commission considers that antimicrobials for production animals might be  further  segmented
      taking into account (i) the active ingredient,[26] (ii) mode of administration and (iii) different species.

  40) As regards the mode of administration, and in line with previous Commission's decisions, the large  majority  of  the  respondents  to  the
      market investigation submitted that injectable products are often very  different  from  oral  formulations  from  the  point  of  view  of
      efficiency, prices, easiness of administration, duration of action and targeted pathology.[27] Moreover,  looking  at  a  further  possible
      segmentation of the oral products into pre-mixes and solubles, the respondents to the market investigation  mostly  from  the  demand  side
      submitted that these products might not always be fully  substitutable.  This  is  mainly  due  to  the  differences  in  the  easiness  of
      administration or the differences in the equipment of the farmers,  the  speed  of  administration  and  in  some  countries,  due  to  the
      legislative or regulatory framework (in countries like Denmark for example).[28]

  41) Furthermore, the respondent customers to the market investigation submitted that they would not switch  from  pre-mixes  antimicrobials  to
      soluble products in case of a permanent price increase of 5-10% of the  pre-mix  antimicrobials.[29]  However,  for  the  purpose  of  this
      decision, a further segmentation of the market by mode of administration into injectable, and oral products (and  within  oral  products  a
      further segmentation between pre-mix and soluble products) can be left open as the proposed transaction does not raise serious doubts as to
      its compatibility with the internal market with respect to any plausible product market definition.

  42) Finally, when it comes to different species of production animals, the market investigation showed mixed results.  One  supplier  mentioned
      that at least the major species should be taken into account,  mentioning  swine,  poultry,  cattle  and  farm  rabbits.[30]  However,  the
      Commission notes that there are several products indicated for two or even three different species. Moreover the  Centre  Européen  d’Etude
      pour la Santé Animale (CEESA)[31] does not collect data per species. However, for the purpose of this decision, a further  segmentation  of
      the market by species can be left open as the proposed transaction does not raise serious doubts as to its compatibility with the  internal
      market with respect to any plausible product market definition.

2 Conclusion

  43) In the present case, the precise product market definition for antimicrobials for production animals can  be  left  open  as  the  proposed
      transaction does not raise serious doubts as to its compatibility with the internal market with respect to  any  plausible  product  market
      definition.

5 Parasiticides for production animals

  44) The Commission precedents referred to in Section 4.1.2 concerning parasiticides for companion animals  are  also  relevant  for  production
      animals. The Commission's investigation and assessment focuses on endoparasiticides and endectocides  only  as  Elanco  is  not  active  in
      ectoparasiticides. Therefore, ectoparasiticides are not considered further.

1 The views of the Notifying Party

  45) Firstly, similarly to companion animals, the Notifying Party considers that most endoparasiticides compete with endectocides  as  customers
      use them interchangeably to treat internal worms in production animals, with no  significant  difference  in  effectiveness,  duration,  or
      withdrawal period.

  46) Secondly, the Notifying Party argues that the suppliers of endoparasiticides typically price their products below the price of endectocides
      to maintain competitiveness.

  47) Finally, the Notifying Party does not consider appropriate to differentiate the parasiticides for production animals by species, since many
      of the Parties' products are indicated for several species, or by any other criteria.

2 The results of the market investigation and the Commission's assessment

  48) As regards the substitutability between endectocides and endoparasiticides, the results from  the  market  investigation  were  mixed.  One
      supplier explained that "giving the sliding scale between targeted Parasiticides on the one hand and broad-coverage products in  the  other
      hand, it is difficult to delineate precise borders of each  of  these  segments".[32]  Additionally,  while  one  supplier  indicated  that
      endoparasiticides and endectocides are different from the point of view of price, duration of action and withdrawal  time,  other  supplier
      mentioned that "it is common for endectocide compounds to be used interchangeably with endoparasiticides  for  the  treatment  of  internal
      parasiticides when in single active and multiple active formulations".[33] From the supply side, switching from one segment to  another  is
      not an easy process and could take up to even five to eight years.[34] On this basis, there are arguments to suggest that endoparasiticides
      and endectocides may constitute separate markets. However, taking into account the  degree  of  substitutability  between  endo  /  endecto
      products, the Commission considers that product market for parasiticides for production animals could also be segmented along these  lines.
      In any case, the Commission considers that the market definition for endoparasiticides, endectocides or endo /  endectocides  can  be  left
      open as the proposed transaction does not give rise to competition concerns under any plausible product market definition.

  49) As regards the mode of administration, the market investigation results were inconclusive, indicating that a more  appropriate  delineation
      should be done according to the spectrum of activity, segmenting the market into flukes and nematodes.[35] However, for the purposes of the
      present case, a further split of the market into flukicides and nematodicides can be left open as the proposed transaction  does  not  give
      rise to competition concerns under any plausible product market definition.

  50) Additionally, respondents to the market investigation indicated that a separation by species should also be taken  into  account.  However,
      they have also submitted that some products are suited for several species  and  that  for  example  cattle  and  sheep  could  equally  be
      considered one segment, as argued by the Notifying Party. In this regard, one supplier mentioned that even though "some formulations  might
      be mode adopted for sheep […], sheep and cattle products are the same".[36] However, for the purposes of the present case, a further  split
      of the market by different species can be left open as the proposed transaction does not  give  rise  to  competition  concerns  under  any
      plausible product market definition.

3 Conclusion

  51) In the present case, the precise product market definition for endoparasicitides and endectocides, but also the alternative segment endo  /
      endecto can be left open as the proposed transaction does not raise serious doubts as to its compatibility with the  internal  market  with
      respect to any plausible product market definition.

  52) Moreover, as regards the segmentation of market for species can also be left open as the proposed transaction does not raise serious doubts
      as to its compatibility with the internal market with respect to any plausible product market definition.

2 Geographic market definition

  53) In previous decisions, the Commission has consistently considered that relevant geographic markets in  the  animal  health  sector  have  a
      national dimension.[37] Although the animal health regulation has been harmonised to a certain extent at the EU level  and  although  there
      are certain procedures which operate on a pan-EEA level, the existence of national regulatory authorities that can impose certain  national
      recommendations or prohibitions depending on the specific situation in each country,[38]  distribution  systems  and  national  preferences
      indicates that the markets for animal pharmaceuticals are still national.

1 The views of the Notifying Party

  54) The Notifying Party submits that animal health products are subject to national and mutual recognition registration systems  which  require
      products to be sold according to indications and uses prescribed  by  national  registration  and  approval  requirements.   The  sales  of
      pharmaceuticals for animal use are thus influenced by different  regulatory  regimes  concerning  administrative  procedures  and  approval
      requirements (i.e. national marketing authorizations).

  55) However, the Notifying Party also submits that there is a growing trend towards competition across borders due  to  the  recent  regulatory
      changes (EU centralised registration procedure for new products) and to the presence of large multinational players across  several  Member
      States with a similar or identical product portfolio.

2 The results of the market investigation and the Commission's assessment

  56) The respondents to the market investigation have indicated that the sale of animal health products is governed by the laws and  regulations
      specific to each country in which animal health products are sold,[39] although there  has  also  been  mentioned  that  the  registrations
      requirements are now more and more uniform across the EEA.[40] Moreover, one supplier mentioned that there is a  growing  trend  to  source
      parasiticides via the internet, rather than by the classic distribution channels, which could also indicate a much wider geographic  market
      definition. However, the same respondent also mentioned that the different national legislation and registration status  of  products,  the
      prevalence of certain diseases in certain areas speak in favour of national markets.[41] Indeed, the legislation  in  some  countries  (for
      example in Denmark) as regards the usage of antimicrobials in the food of the production animals influences the sales of  certain  products
      and their formulations.

  57) Several respondents to the market investigation from the supply side submitted that distribution and prices remain at national level,  thus
      speaking in favour of national markets. In relation to the distribution system, it seems that in some countries it is made directly through
      vets, while in other countries pharmaceuticals these are sold via wholesalers and then to pharmacies.[42]

  58) Based on the results of the market investigation, the Commission concludes that the markets analysed in this case are national in scope.

3 Competitive Assessment

  59) The Notifying Party has based its competitive assessment on the filtering system used by the Commission in cases concerning  pharmaceutical
      products for humans and animals, as well as medical devices.[43] Based on  this  methodology,  animal  health  pharmaceutical  markets  are
      analysed according to three categories:

a. Group 1: where the Parties’ combined market share exceeds 35% and the increment exceeds 1%;

b. Group 2: where the Parties’ combined market share exceeds 35% but the increment is less than 1%;

c. Group 3: The Parties’ combined market share is between 20% and 35%.

  60) The markets which fall within Group 2 because the Parties' combined market shares exceeded 35% and the increment does not exceed 1% are the
      following:[44] (i) for companion animals: the market for endoparasiticides in the Netherlands, Poland and the United Kingdom and the market
      of otitis externa in the Netherlands; (ii) for production animals: the market of nematodicides  for  sheep  in  Belgium.  Given  the  small
      increment and the fact that no concerns have been raised by customers and competitors in  the  course  of  the  market  investigation,  the
      Commission concludes that the transaction does not raise serious doubts as to its compatibility with the  internal  market  in  respect  of
      these possible markets.

  61) The markets which fall within Group 3 because the Parties' combined market shares did not exceed 35% are the following:

a. Parasiticides for companion animals: the market of endoparasiticides in Austria, Germany, Italy and Portugal; the market for  endo/endecto  in
   Belgium, France, Greece and Ireland; the market for otitis externa in the Czech Republic, in France  and  Poland;  the  market  for  heartworm
   treatment in Portugal and Spain;

b. Antimicrobials for production animals:  the market of aminoglycoside antimicrobials for production animals in Ireland and the United  Kingdom;
    the market for injectable antimicrobials for cattle in the United Kingdom;   the market for  oral  antimicrobials  for  swine  in  the  Czech
   Republic, Denmark, Greece, Hungary and Poland; the market for oral  antimicrobials  for  cattle  in  the  Netherlands;  the  market  for  oral
   antimicrobials for poultry in the Netherlands, Poland, Portugal and the United Kingdom; the market of oral antimicrobials for  swine  (premix-
   only) in the Czech Republic, Greece, Hungary, Poland, Portugal and Spain; the market for oral antimicrobials for swine (soluble) in the  Czech
   Republic, Denmark, Greece, the Netherlands, Poland and the United Kingdom; the market for oral antimicrobials  for  cattle  (soluble)  in  the
   Netherlands,  the market for oral antimicrobials for poultry (soluble) in the Netherlands, Poland, Portugal and the United Kingdom;

c. Parasiticides for production animals: the market for endoparasiticides for cattle and sheep combined  in  Ireland  and  the  Netherlands;  the
   market for endoparasiticides for cattle in Ireland and the United Kingdom; the market for endoparasiticides for sheep in Germany, Ireland  and
   Spain; the market for endoparasiticides and endectocides for cattle and sheep combined in the United Kingdom; the market for endoparasiticides
   and endectocides for sheep in Ireland and the Netherlands; the market for nematodicides for cattle and sheep combined in the  United  Kingdom;
   the market for nematodicides for sheep in the Netherlands; the market for flukicides for cattle and sheep combined in Ireland; the market  for
   flukicides for cattle in Germany and Ireland; and the market for flukicides for sheep in Ireland and Spain.

  62) As regards the Group 3 markets mentioned in paragraph (61), the Commission's market investigation and assessment did not  reveal  that  the
      Parties were […] innovators or held […] pipeline products in any of these markets. The increment in market share in these markets is  often
      not important and the combined entity will still face  significant  competition  from  a  number  of  other  competitors.  Furthermore,  no
      substantiated concerns have been raised by customers in the course of the market investigation as regards these markets. Consequently,  the
      Commission concludes that the transaction is unlikely to raise serious doubts as to its compatibility with the  internal  market  on  these
      markets.

  63) The following sections focus on the markets that fall within Group 1 and on which the Commission has focused its investigation.

4 Companion Animals

  64) The transaction will lead to the following Group 1 markets for  companion  animals:  (i)  endoparasiticides  in  Belgium,  France,  Greece,
      Ireland, Spain and the Netherlands; (ii) heartworm parasiticides in Italy, Spain and Portugal; and (iii) otitis externa in Germany, Austria
      and the Czech Republic.

1 Endoparasiticides in Belgium, France, Greece, Ireland, Spain and the Netherlands

  65) As shown in table 1 to table 5 below, the combined market shares of the Parties in the segment comprising all endoparasiticides  (excluding
      endectocides) for companion animals are [40-50]% in Belgium (Elanco: [0-5]%; NAH: [30-40]%); [40-50]% in France (Elanco: [0-5]%; NAH:  [40-
      50]%); [40-50]% in Greece (Elanco: [5-10]%; NAH: [30-40]%), [50-60]% in Ireland (Elanco: [0-5]%; NAH:  [50-60]%),  and  [30-40]%  in  Spain
      (Elanco: [5-10]%; NAH: [30-40]%).

      Table 1: Endoparasiticides for Companion Animals (Belgium) 2013

|Manufacturer                 |Sales (EUR 000)         |Shares                  |
|Bayer                        |[…]                     |[40-50]%                |
|Novartis                     |[…]                     |[30-40]%                |
|Zoetis                       |[…]                     |[5-10]%                 |
|Merck                        |[…]                     |[5-10]%                 |
|Elanco                       |[…]                     |[0-5]%                  |
|Ceva Santé Animale           |[…]                     |[0-5]%                  |
|Virbac                       |[…]                     |[0-5]%                  |
|Combined                     |[…]                     |[40-50]%                |
|Total                        |[…]                     |100.0%                  |

                                              Source: Form CO, Annex 8, version of 18 September 2014

      Table 2: Endoparasiticides for Companion Animals (France) 2013

|Manufacturer                   |Sales (EUR 000)       |Shares                  |
|Novartis                       |[…]                   |[40-50]%                |
|Bayer                          |[…]                   |[20-30]%                |
|Merck                          |[…]                   |[0-5]%                  |
|Zoetis                         |[…]                   |[0-5]%                  |
|Vétoquinol                     |[…]                   |[0-5]%                  |
|Merial                         |[…]                   |[0-5]%                  |
|Ceva Santé Animale             |[…]                   |[0-5]%                  |
|Elanco                         |[…]                   |[0-5]%                  |
|Virbac                         |[…]                   |[0-5]%                  |
|Others4F4F                     |[…]                   |[20-30]%                |
|Combined                       |[…]                   |[40-50]%                |
|Total                          |[…]                   |100.0%                  |

                                              Source: Form CO, Annex 8, version of 18 September 2014

      Table 3: Endoparasiticides for Companion Animals (Greece) 2013

|Manufacturer                    |Sales (EUR 000)       |Shares                  |
|Novartis                        |[…]                   |[30-40]%                |
|Bayer                           |[…]                   |[30-40]%                |
|Zoetis                          |[…]                   |[5-10]%                 |
|Ceva Santé Animale              |[…]                   |[5-10]%                 |
|Elanco                          |[…]                   |[5-10]%                 |
|Merck                           |[…]                   |[0-5]%                  |
|Virbac                          |[…]                   |[0-5]%                  |
|Combined                        |[…]                   |[40-50]%                |
|Total                           |[…]                   |100.0%                  |

                                              Source: Form CO, Annex 8, version of 18 September 2014

      Table 4: Endoparasiticides for Companion Animals (Ireland) 2013

|Manufacturer                   |Sales (EUR 000)       |Shares                  |
|Novartis                       |[…]                   |[50-60]%                |
|Bayer                          |[…]                   |[30-40]%                |
|Ceva Santé Animale             |[…]                   |[5-10]%                 |
|Merck                          |[…]                   |[0-5]%                  |
|Elanco                         |[…]                   |[0-5]%                  |
|Zoetis                         |[…]                   |[0-5]%                  |
|Combined                       |[…]                   |[50-60]%                |
|Total                          |[…]                   |100.0%                  |

                                              Source: Form CO, Annex 8, version of 18 September 2014

      Table 5: Endoparasiticides for Companion Animals (Spain) 2013

|Manufacturer                   |Sales (EUR 000)       |Shares                  |
|Bayer                          |[…]                   |[30-40]%                |
|Novartis                       |[…]                   |[30-40]%                |
|Merial                         |[…]                   |[10-20]%                |
|Elanco                         |[…]                   |[5-10]%                 |
|Virbac                         |[…]                   |[0-5]%                  |
|Merck                          |[…]                   |[0-5]%                  |
|Zoetis                         |[…]                   |[0-5]%                  |
|Ceva Santé Animale             |[…]                   |[0-5]%                  |
|Combined                       |[…]                   |[30-40]%                |
|Total                          |[…]                   |100.0%                  |

                                              Source: Form CO, Annex 8, version of 18 September 2014

1 The views of the Notifying Party

  66) The Notifying Party claims that a very large number of players compete throughout Europe and that there will be between five and seven post-
      merger firms competing with the Parties in each of the national Group 1 markets (six in Belgium; nine in France; six  in  Greece;  five  in
      Ireland and seven in Spain).

  67) The Notifying Party claims that such high fragmentation exists partly  because  all  products  are  off-patent  and  products  compete  for
      customers obtaining them from both vets and over the counter (e.g. pet supply stores, grocery stores). The Notifying Party also argues that
      market shares which do not include endectocides (as  shown  above)  are  misleading  because  endectocides  compete  most  closely  against
      endoparasiticides in southern EEA countries. The merger only leads to Group 1 markets if endectocides are not taken into account.

  68) In any case, even if endectocides are not taken into account in the market shares, the Notifying Party  claims  that:  (i)  several  highly
      credible firms will continue to compete after the merger, even under such scenario;  (ii)  the  incremental  increase  is  very  small  and
      therefore the proposed merger does nothing to change the combined firm’s need to compete  against  the  other  major  players  like  Bayer,
      Merial, Merck and Zoetis; (iii) Virbac recently launched in France a new  endoparasiticide  using  the  same  active  ingredient  as  NAH’s
      Milbemax; (iv) in none of the five Group 1 countries is Elanco the major competitive constraint against NAH; (v) the Parties are not  close
      competitors. The Notifying Party argues that Parties are not close competitors in particular given that (a) Milbemax  (NAH)  is  a  general
      wormer used for gastro-intestinal worms, while Guardian (Elanco) is effective only against heartworm[45], (b) the vast majority of Elanco’s
      endoparasiticides sales are via the injectable version of Guardian while none of NAH’s products is injectable and (c) the Parties' products
      contain different active ingredients, which the parties purchase from different sources.

2 The Commission's assessment

  69) In France, Belgium and Ireland the increment brought by Elanco is very small and in any case below [0-5]% ([0-5]%  in  Belgium,  [0-5]%  in
      France and [0-5]% in Ireland). In Greece and Spain, despite the increment being a bit higher, Elanco remains a small player, with a  market
      share of [5-10]% in Greece and [5-10]% in Spain.

  70) In addition, it is important to take into account  that  the  market  shares  referred  to  in  the  precedent  paragraph  do  not  include
      endectocides, whilst, as better described in the market definition section, the results of the market investigation  were  mixed  regarding
      the question whether there is substitutability between ectoparasiticides, endoparasiticides and endectocides.

  71) In any case, and even for endoparasiticides only, several competitors will remain active post-merger in all of the above-mentioned Group  1
      countries. In particular, the merging Party will face competition from Bayer which is the market leader in Belgium and Spain (with [40-50]%
      and [30-40]% market share respectively) and a strong competitor in France ([20-30]%), Greece ([30-40]%) and Ireland ([30-40]%).

  72) Given the above and in particular taking into account that the increment brought about by the merger is small and  that  other  competitors
      remain in the market post-merger, the Commission considers that  the  proposed  transaction  does  not  raise  serious  doubts  as  to  its
      compatibility with the internal market on the market for endoparasiticides for companion animals in Belgium, France,  Ireland,  Greece  and
      Spain.

3 Conclusion

  73) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the  internal  market  on
      the market for endoparasiticides in Belgium, France, Greece, Ireland, Spain and the Netherlands.

2 Heartworm parasiticides for companion animals in Italy, Spain and Portugal

  74) Heartworm is prevalent only in south Europe. Therefore, the Parties' activities overlap in Italy, Spain and Portugal.

  75) Post-transaction, the Parties will have a combined market share of [30-40]% in Italy (Elanco:  [20-30]%;  NAH:  [5-10]%)  for  the  segment
      comprising heartworm parasiticides for companion animals, as can be seen in table 6 below.

      Table 6: Heartworm Shares (Italy) 2013

|Company                     |Sales (EUR000)              |Shares of supply                |
|Merial                      |[…]                         |[30-40]%                        |
|Elanco                      |[…]                         |[20-30]%                        |
|Zoetis                      |[…]                         |[20-30]%                        |
|NAH                         |[…]                         |[5-10]%                         |
|Bayer                       |[…]                         |[0-5]%                          |
|Virbac                      |[…]                         |[0-5]%                          |
|Combined                    |[…]                         |[30-40]%                        |
|Total                       |[…]                         |100.0%                          |

                 Source: Form CO, Annex 8, version of 18 September 2014

  76) NAH has a product called Milbemax that treats several worms, including heartworm. If this product is added to the  market  shares  for  the
      market comprising heartworm products only, the Parties' combined market shares would reach [30-40]% in Italy.  In  addition,  and  only  if
      Milbemax is added, the transaction would also lead to Group 1 markets in Spain (where combined market shares would reach [50-60]%)  and  in
      Portugal (where combined market shares would reach [40-50]%), as can be seen in table 7 to table 9 below:

      Table 7: Heartworm Shares - including Milbemax (Italy) 2013

|                                                      |                                           |
|Heartworm Products in Italy 2013                      |Adding all Milbemax sold in heartworm areas|
|Company           |Sales (EUR 000)     |Shares        |Sales (EUR000)        |Shares              |
|Merial            |[…]                 |[30-40]%      |[…]                   |[30-40]%            |
|Elanco            |[…]                 |[20-30]%      |[…]                   |[20-30]%            |
|Zoetis            |[…]                 |[20-30]%      |[…]                   |[20-30]%            |
|NAH               |[…]                 |[5-10]%       |[…]                   |[10-20]%            |
|Bayer             |[…]                 |[0-5]%        |[…]                   |[0-5]%              |
|Virbac            |[…]                 |[0-5]%        |[…]                   |[0-5]%              |
|Combined          |[…]                 |[30-40]%      |[…]                   |[30-40]%            |
|Total             |[…]                 |100.0%        |[…]                   |100.0%              |

                                        Source: Responses to Commission's RFI version of 10 September 2014

      Table 8: Heartworm Shares - including Milbemax (Spain) 2013

|                                                      |                                           |
|Heartworm Products in Spain                           |Adding all Milbemax                        |
|2013                                                  |                                           |
|Company               |Sales (EUR 000)|Shares         |Sales (EUR 000)     |Shares                |
|Zoetis                |[…]            |[40-50]%       |[…]                 |[30-40]%              |
|Merial                |[…]            |[10-20]%       |[…]                 |[10-20]%              |
|Elanco                |[…]            |[10-20]%       |[…]                 |[10-20]%              |
|Bayer                 |[…]            |[5-10]%        |[…]                 |[5-10]%               |
|NAH                   |[…]            |[5-10]%        |[…]                 |[40-50]%              |
|Combined              |[…]            |[20-30]%       |[…]                 |[50-60]%              |
|Total                 |[…]            |100.0%         |[…]                 |100.0%                |

                                        Source: Responses to Commission's RFI version of 10 September 2014

      Table 9: Heartworm Shares including Milbemax (Portugal) 2013

|                                                      |                                           |
|Heartworm Products in Portugal 2013                   |Adding all Milbemax                        |
|Company               |Sales (EUR 000) |Shares        |Sales (EUR 000)     |Shares                |
|Merial                |[…]             |[30-40]%      |[…]                 |[20-30]%              |
|Bayer                 |[…]             |[30-40]%      |[…]                 |[20-30]%              |
|Elanco                |[…]             |[10-20]%      |[…]                 |[10-20]%              |
|Zoetis                |[…]             |[10-20]%      |[…]                 |[5-10]%               |
|NAH                   |[…]             |[0-5]%        |[…]                 |[30-40]%              |
|Combined              |[…]             |[20-30]%      |[…]                 |[40-50]%              |
|Total                 |[…]             |100.0%        |[…]                 |100.0%                |

                                        Source: Responses to Commission's RFI version of 10 September 2014

1 The views of the Notifying Party

  77) The Notifying Party claims that Milbemax should not be added to the market shares for heartworm products, given that despite the fact  that
      it can be used for heartworm prevention, it is mainly used instead for common gastric intestinal worms. Indeed, Milbemax is  not  indicated
      for the ongoing prevention of heartworm but it is instead indicated for the treatment of mixed infections involving roundworm and tapeworm.
      It is used for heartworm only if a concomitant treatment against certain gastric intestinal worms  is  also  indicated.  In  addition,  its
      heartworm indication is limited to continuing to protect the animal only during the treatment of the mixed infection (typically one dose).

  78) Furthermore, the Notifying Party argues that Novartis’ marketing practices evidence that Milbemax is not used for heartworm. In Italy,  the
      country where heartworm is by far most prevalent, Novartis promotes  its  endectocide  Sentinel  as  “the  most  efficient  and  convenient
      heartworm drug in the market.”[46] Milbemax, on the other hand, is portrayed  in  Italy  only  as  a  de-wormer  (anthelmintic)   with   no
      reference  to heartworm.

  79) Moreover, the Parties’ sales data confirm the little or no use of Milbemax for heartworm: while Milbemax has very high sales  in  countries
      where heartworm is absent (e.g. United Kingdom and Germany), its sales are minimal in countries where heartworm is prevalent  (e.g.  Italy,
      Portugal, and Spain). Furthermore, the Notifying Party claims that, despite it being by far the largest heartworm country in Europe,  Italy
      is the country where Milbemax’ sales per medicated dog are the lowest. In Italy, in regions  where  heartworm  prevails,  Milbemax’s  sales
      amount to [60-70]%, which is low compared to medications indicated and used for ongoing heartworm prevention.   NAH’s  heartworm  products,
      for example, obtain over [90-100]% of their sales in the heartworm regions. Because heartworm is prevalent in most areas of Italy, the fact
      that Milbemax’s sales per medicated dog are so low in Italy compared to non-heartworm countries is a strong indication that the product  is
      not purchased to treat heartworm.

  80) In addition, the Notifying Party claims that there are regions within the  above  mentioned  EEA  member  states  where  heartworm  is  not
      prevalent. The endemic heartworm regions in Spain and Portugal, these are the regions with a prevalence of heartworm  are  limited  to  the
      Ebro river region, Segovia, the Canary islands, the Balearic islands, Levante and the South-west Andalucia  region  in  Spain  and  to  the
      southern part of the country and Madeira in Portugal. As can be seen in table 10 below, the vast majority of Milbemax’s sales do  not  come
      from the heartworm regions, because Milbemax is not indicated for the ongoing prevention of heartworm but it is instead indicated  for  the
      treatment of mixed infections involving roundworm and tapeworm.

      Table 10: Milbemax  Sales - Heartworm Regions versus Non-Heartworm Regions (Spain and Portugal) 2013

|                               |                                                    |                                                    |
|                               |Spain                                               |Portugal                                            |
|                               |                           |                        |                          |                         |
|                               |Sales                      |Percentage of Sales in  |Sales                     |Percentage of Sales in   |
|                               |                           |Type of Region          |                          |Type of Region           |
|                               |(EUR 000)                  |                        |(EUR 000)                 |                         |
|                               |                           |                        |                          |                         |
|Heartworm Regions              |[…]                        |[0-5]%                  |[…]                       |[5-10]%                  |
|                               |                           |                        |                          |                         |
|Non-heartworm                  |[…]                        |[90-100]%               |[…]                       |[90-100]%                |
|Regions                        |                           |                        |                          |                         |
|                               |                           |                        |                          |                         |
|Total                          |[…]                        |100%                    |[…]                       |100%                     |

                                        Source: Responses to Commission's RFI version of 10 September 2014

  81) In any event, the Notifying Party claims that even if Milbemax’s sales were allocated to a market for the prevention of heartworm, Group  1
      markets would not be created in heartworm areas in Spain or Portugal, where combined market shares would result in a  [20-30]%  overlap  in
      Spain and [20-30]% in Portugal, as shown by the table 11 and table 12 below:

      Table 11: Heartworm Shares - including Milbemax in heartworm areas (Spain) 2013

|                                                         |                                      |
|Heartworm Products in Spain                              |Adding all Milbemax sold in heartworm |
|2013                                                     |areas                                 |
|Company                 |Sales (EUR 000)   |Shares       |Sales (EUR 000)  |Shares              |
|Zoetis                  |[…]               |[40-50]%     |[…]              |[40-50]%            |
|Merial                  |[…]               |[10-20]%     |[…]              |[10-20]%            |
|Elanco                  |[…]               |[10-20]%     |[…]              |[10-20]%            |
|Bayer                   |[…]               |[5-10]%      |[…]              |[5-10]%             |
|NAH                     |[…]               |[5-10]%      |[…]              |[10-20]%            |
|Combined                |[…]               |[20-30]%     |[…]              |[20-30]%            |
|Total                   |[…]               |100.0%       |[…]              |100.0%              |

                                        Source: Responses to Commission's RFI version of 10 September 2014

      Table 12: Heartworm Shares - including Milbemax in heartworm areas (Portugal) 2013

|Heartworm Products in Portugal                           |Adding all Milbemax sold in heartworm |
|2013                                                     |areas                                 |
|Company                 |Sales (EUR 000)   |Shares       |Sales (EUR 000)  |Shares              |
|Merial                  |[…]               |[30-40]%     |[…]              |[30-40]%            |
|Bayer                   |[…]               |[30-40]%     |[…]              |[30-40]%            |
|Elanco                  |[…]               |[10-20]%     |[…]              |[10-20]%            |
|Zoetis                  |[…]               |[10-20]%     |[…]              |[10-20]%            |
|NAH                     |[…]               |[0-5]%       |[…]              |[5-10]%             |
|Combined                |[…]               |[20-30]%     |[…]              |[20-30]%            |
|Total                   |[…]               |100.0%       |[…]              |100.0%              |

                                        Source: Responses to Commission's RFI version of 10 September 2014

  82) Finally, the Notifying Party claims that another fact that supports the argument that Milbemax is different from the  products  that  treat
      only heartworm is that its price is higher. For example, for dogs above 25kg, Milbemax is priced […] higher than Sentinel, which shows that
      it is not economical to use Milbemax for heartworm compared to Sentinel. Also Milbemax is priced differently to the  endectocide  Trifexis,
      […] for most dog sizes ([…]).

2 The results of the market investigation and the Commission's assessment

  83) The respondents to the market investigation submitted that, according to the Notifying Party's claims, in addition to treating / preventing
      heartworm, Milbemax is mainly used for treating other diseases and worms.[47]

  84) Therefore, customers use Milbemax when they need to treat several worms (including heartworm) but not when they need to treat / prevent for
      heartworm only, as Milbemax is indicated rather to treat gastric intestinal worms. This is further supported by NAH's  marketing  practices
      that describe Milbemax as a gastro-intestinal de-wormer. Additionally,  the sales data provided by the Notifying Party show  that  Milbemax
      has higher sales in countries where heartworm is not prevalent and that sales of Milbemax per dog in Italy – the country were heartworm  is
      more prevalent – are the lowest. Moreover, the vast majority of Milbemax's sales  do  not  come  from  the  heartworm  regions  within  the
      countries where heartworm is prevalent.

  85) Consequently, the Commission considers that Milbemax is not a  close  competitor  with  products  that  treat  heartworm  only.  Therefore,
      including Milbemax in the market shares would not correspond to the segment treating heartworm only and it  would  overstate  the  Parties'
      position.

  86) The Commission has also investigated the issue whether the merger would generate concerns regarding the sourcing of milbemycin, the  active
      ingredient of Milbemax. The market investigation results indicated that there are several alternative suppliers for heartworm  products  in
      Italy. In particular, four respondents from the supply side stated they source different active ingredients from third party suppliers.[48]

  87) In any event, even if Milbemax sales in heartworm areas were to be allocated to a market for the prevention of heartworm, Parties' combined
      market shares would be [20-30]% and [20-30]% in Spain and Portugal respectively, therefore not representing a  Group  1  markets  in  those
      countries.

  88) As to Italy, as it can be seen in table 7 the allocation of Milbemax sales in heartworm areas in Italy for  the  prevention  of  heartworm,
      allocating Milbemax sales would not change significantly market shares of the Parties. Indeed, the result only marginally  increases  NAH’s
      share (from [5-10]% to [10-20]%) and the combined share (from [30-40]% to [30-40]%). The Group 1 country in Italy would therefore remain.

  89) Consequently, market shares which will be taken into account for this segment will not include Milbemax, leaving only Italy as  a  Group  1
      country, which is further analysed.

  90) In Italy, the market leader is Merial with [30-40]% with its Heartguard product. Currently, Elanco (Guardian  and  the  soon-to-be-launched
      Trifexis) is number two with [20-30]%, followed by Zoetis (Revolution / Stronghold) with [20-30]%, NAH (Milbemax  and  Sentinel)  with  [5-
      10]%, and Bayer (Advantage / Advocate) with [0-5]%. It is important to note that Elanco is launching a product called  Trifexis,  which  is
      similar to NAH's Sentinel.

3 The views of the Notifying Party

  91) The Notifying Party argues that there is a large number of strong players in Italy, including Merial (which remains the largest  competitor
      post-merger), Zoetis and Bayer.

  92) The Notifying Party also argues that in addition to these competing  products,  new  entry has occurred lately, namely in 2013, when  Bayer
      has added new indications for its endectocide Advocate to ensure that heartworm is covered and when Virbac’s Filarive has been launched  in
      Italy in the first quarter of 2011.

  93) The Notifying Party also claims that new entry is imminent and further precludes any competitive  concern:  Merck[49]  and  Merial[50]  are
      introducing new endectocides to offer yet additional alternatives for heartworm prevention.

  94) The Notifying Party also argues that Elanco and NAH are not particularly close competitors. On the contrary,  Elanco’s  heartworm  product,
      Guardian, is the only such drug in Europe administered by injection.  Unlike NAH’s tablets, Guardian is administered by the  vet  and  only
      once, to protect the animal for the entire season. This avoids the uncertainties of consistent compliance by pet owners. In  contrast,  the
      tablets and topical solutions offered by NAH and the other players are applied by pet owners  for  the  animal’s  lifetime,  a  significant
      differentiating feature affecting customer preferences.

4 The results of the market investigation and the Commission's assessment

  95) The market investigation respondents confirmed the Notifying Parties' claims that Merial is the market leader for products  in  oral  form.
      The market investigation also provided indications that Elanco is important in products in injectable form.[51]

  96) However, contrary to the Notifying Party's arguments, the majority of respondents to the market investigation submitted  that  the  Parties
      are close competitors on this market.[52] In addition, some respondents from the supply side to the market investigation expressed concerns
      that the transaction will have an impact on the availability of heartworm products.[53] One respondent expressed concerns that  post-merger
      the Parties would have a dominant position on this market.[54] However, from the demand side, the market investigation  showed  indications
      that the transaction will have no impact on the availability of heartworm products in Italy, nor will it lead to higher prices.[55]

  97) The majority of respondents to the market investigation submitted that there are alternative suppliers for heartworm products in  Italy[56]
      and that customers multi-source.[57] The market investigation also provided indications that, in case the  Parties'  were  to  raise  their
      prices, customers would switch to other competing products. [58]

  98) The market investigation did not show that Parties are considered as particular aggressive or innovative competitors.[59]

  99) Some respondents to the market investigation submitted that entry has occurred in the past three  years[60],  namely  by  Virbac  with  its
      product Filarive in 2011[61] and also provided indications that there will be future potential entry from Merck and Merial.[62]

 100) As mentioned above in paragraph (90), Elanco will soon launch Trifexis, a patented product which  also  treats  heartworm.  The  Commission
      considers that even after the launch of Trifexis the above mentioned competitive conditions apply, namely that  there  will  be  sufficient
      competitors post-merger to which customers could switch, and that entry has occurred and will occur in the future.

 101) In addition, some respondents to the market investigation submitted that generics are not  very  important  and  customers  prefer  branded
      products.[63] However, some other respondents provided indications that customers currently purchase generics.[64]Taking into  account  the
      results of the market investigation above, and in particular taking into account that, despite Parties' products  being  close  competitors
      and that there might be some barriers to entry such as brand loyalty, product credibility,  marketing  investment  and  regulatory  issues,
      Merial is the market leader and that there are several competitors remaining post-merger, there are  alternative  suppliers  for  heartworm
      products, customers multisource and would switch to other competitors' products in case of a price increase, generics exist and  have  been
      indicated as a source of supply for some respondents to the market investigation, entry has occurred  in  recent  past   years  and  it  is
      expected to take place also in the future, the Commission concludes that the proposed transaction does not raise serious doubts as  to  its
      compatibility with the internal market on the market for heartworm parasiticides for companion animals in Italy.

5 Conclusion

 102) On this basis, the Commission concludes that the proposed transaction does not raise serious  doubts  as  to  its  compatibility  with  the
      internal market on the market for heartworm parasiticides in Italy, Spain and Portugal.

3 Otitis externa antimicrobials in Germany, Austria and the Czech Republic

 103) Regarding the segment for otitis externa antimicrobials, the Parties' products are Panolog (NAH) and  Surolan  (Elanco).  NAH  has  also  a
      product in the pipeline, expected to be launched in […].

 104) The Commission notes that in this market, the importance and success of an otitis externa product is based on the combination of  different
      active ingredients. The Parties' products contain  different  active  ingredients.  NAH's  Panalog  contains  nystatin,  neomycin  sulfate,
      thiostrepton and triamcinolone acetonide, while Elanco's Surolan contains miconazole nitrate, polymyxin B sulfate and prednisolone acetate.
      Other products, such as Merck's  Posatex  contains  orbifloxacin,  mometasone  furoate  and  posaconazole  while  Merck's  Otomax  contains
      gentamicin, betamethasone and clotrimazole.

 105) The combined market share of the Parties in the segment of antimicrobials for otitis externa in companion animals in 2013  is  [40-50]%  in
      Austria (Elanco: [40-50]%; NAH: [0-5]%) and [50-60]% in Germany (Elanco: [40-50]%; NAH: [5-10]%); as can be seen in table 13 and  table  14
      below.

   Table 13 : Otitis Externa for Companion Animals (Austria) 2013

|Manufacturer                |Sales (EUR 000)    |Shares             |
|Elanco                      |[…]                |[40-50]%           |
|Vétoquinol                  |[…]                |[20-30]%           |
|Merck                       |[…]                |[10-20]%           |
|Virbac                      |[…]                |[5-10]%            |
|NAH                         |[…]                |[0-5]%             |
|Others                      |[…]                |[10-20]%           |
|Combined                    |[…]                |[40-50]%           |
|Total                       |[…]                |100.0%             |

      Source: Form CO, Annex 8, version of 18 September 2014

 106) In Austria, Elanco is the market leader with [40-50]%, followed by Vétoquinol with [20-30]%, Merck with [10-20]%, Virbac with [5-10]%,  NAH
      with [0-5]% and others with [10-20]%.

   Table 14: Otitis Externa for Companion Animals (Germany) 2013

|Manufacturer             |Sales (EUR 000)      |Shares            |
|Elanco                   |[…]                  |[40-50]%          |
|Vétoquinol               |[…]                  |[20-30]%          |
|Virbac                   |[…]                  |[10-20]%          |
|Merck                    |[…]                  |[10-20]%          |
|NAH                      |[…]                  |[5-10]%           |
|Combined                 |[…]                  |[50-60]%          |
|Total                    |[…]                  |100.0%            |

           Source: Form CO, Annex 8, version of 18 September 2014

 107) In Germany, Elanco is already the market leader with [40-50]%, followed by Vétoquinol with [20-30]%, Virbac with [10-20]%, Merck with  [10-
      20]% and NAH with [5-10]%.

 108) In the Czech Republic, the Parties' overlapping activities did not lead to a Group 1 market in 2013[65] (Elanco:  [20-30]%;  NAH:  [0-5]%).
      However, in 2012 the combined market shares of the Parties in the segment of antimicrobials for otitis externa in  companion  animals  were
      [60-70]% in the Czech Republic (Elanco: [50-60]%; NAH: [10-20]%), as can be seen in table 15 below.

   Table 15 : Otitis treatment for Companion Animals (Czech Republic) 2012

|Manufacturer               |Sales (EUR 000)           |Shares            |
|Elanco                     |[…]                       |[50-60]%          |
|Vétoquinol                 |[…]                       |[10-20]%          |
|NAH                        |[…]                       |[10-20]%          |
|Merck                      |[…]                       |[5-10]%           |
|Virbac                     |[…]                       |[0-5]%            |
|Bayer                      |[…]                       |[0-5]%            |
|Combined                   |[…]                       |[60-70]%          |
|Total                      |[…]                       |100%              |

                 Source: Form CO, Annex 8, version of 18 September 2014

 109) According to the Notifying Party, in 2013, NAH was only the third largest player in otitis treatments with a share of just  [20-30]%.   Its
      share has remained relatively constant compared to Merck, which grew from [5-10]% in 2011 to [20-30]% in 2013.  Similarly, Virbac  expanded
      from [0-5]% to [10-20]% during the same period, as can be seen in table 16 below. The fact that other competitors gained  market  share  is
      mainly due to […].

   Table 16: Otitis treatment for Companion Animals (Czech Republic) 2013

|Manufacturer              |Sales (EUR000)             |Shares            |
|Vétoquinol                |[…]                        |[20-30]%          |
|Merck AH                  |[…]                        |[20-30]%          |
|NAH                       |[…]                        |[20-30]%          |
|Virbac                    |[…]                        |[10-20]%          |
|Elanco                    |[…]                        |[0-5]%            |
|Combined                  |[…]                        |[20-30]%          |
|Total                     |[…]                        |100.0%            |

                 Source: Form CO, Annex 8, version of 18 September 2014

 110) Should a narrower segmentation be retained encompassing topical products only  (i.e.  excluding  injectable  and  orals),  the  competitive
      picture in Austria, Germany and the Czech Republic would not differ as both Parties’ products for otitis externa  are  topical  (cream  and
      drops) and the Parties' main competitors' products are also topical, including Virbac’s Easotic (otic suspension),  Merck's  Posatex  (otic
      suspension) and Otomax (ointment), Vétoquinol’s Aurizon (ear drops), Otiprin (ear drops) and Dechra's Canaural (ear drops).

1 The views of the Notifying Party

 111) The Notifying Party claims that, post-merger, the combined entity will continue to face  strong  competition  (including  competition  from
      generics manufacturers), that barriers to entry are low, and that Parties' products are off-patent. In particular, generic versions of both
      Surolan and Panolog are already marketed in the United States, for example,  by  Cipla,  Dechra  and  Med  Pharmex.   In  Austria,  generic
      manufacturers have launched several generic products in the  market,  including  Canaural  (Dechra),  Prisulfan  (Norbrook)  and  Otimectin
      (Richter) and many of these same products are also available in Germany, including Canaural (Dechra) and Otimectin (La Vet).

 112) The Notifying Party also claims that there is no evidence that the parties are particularly close competitors. NAH’s Panalog  is  available
      in cream and ointment while Elanco’s Surolan is available only in drops. The products also contain different active ingredients, as Panalog
      contains nystatin, neomycin sulfate, thiostrepton and triamcinolone acetonide, while  Surolan  contains  miconazole  nitrate,  polymyxin  B
      sulfate and prednisolone acetate.

 113) Furthermore, the Notifying Party claims that both Parties' products (Panolog and  Surolan)  are  also  indicated  for  dermatitis  (a  skin
      condition), which was the single most common medical condition in dogs in 2012. Dermatitis covers  a  wide  range  of  skin  diseases  with
      various causes. The Notifying Party estimates that the total demand for dermatitis products for dogs  is  EUR  […]  in  the  EEA  in  2013.
      Surolan’s and Panolog’s total sales in the EEA were EUR […], which includes also the sales for the treatment of  otitis  conditions.   They
      therefore represent only a small part of the EEA dermatitis demand and must be priced to compete not only against  the  many  other  otitis
      products but against the dermatitis products as well.

 114) As to NAH's pipeline product, the Notifying Party claims that despite it overlapping with Elanco’s Surolan, this raises no new issues since
      (i) the parties already overlap in this area; (ii) over ten firms compete in the EEA this highly fragmented  space,  including  such  major
      players as Bayer, Merck, Merial, Vétoquinol, Virbac and others; (iii) Elanco’s Surolan would not compete closely with NAH’ new  product  as
      they contain different active ingredients ([…]) and have different modes of administration ([…]).

2 The results of the market investigation and the Commission's assessment

      Germany and Austria

 115) The respondents to the market investigation in Germany and Austria submitted that Elanco is  the  market  leader  followed  by  Vétoquinol,
      Virbac and Novartis[66] and that it benefits from a competitive advantage.[67]

 116) One respondent to the market investigation expressed concerns that with the limited supply of Panolog (NAH) and with Elanco  having  access
      to all commercial data from Novartis, the Parties would have a major competitive advantage. [68]  In  addition,  some  respondents  to  the
      market investigation expressed concerns that the transaction would have an impact on the availability and prices of otitis externa products
      in Austria and Germany.[69]

 117) Contrary to the Notifying Party's claims, the majority of respondents to the market investigation submitted  that  the  Parties  are  close
      competitors[70] and also that the fact that NAH's Panalog is a cream and  Elanco's  Surolan  a  drop  does  affect  the  closeness  of  the
      products.[71]

 118) The Commission notes that there are sufficient competitors in this  market.  The  majority  of  respondents  to  the  market  investigation
      submitted that there are alternative suppliers for otitis externa products in Germany and Austria, such as Vétoquinol, Merck and Virbac[72]
      and that customers could easily switch suppliers in case of a price increase and that they would further use generics.[73]

 119) The Commission further notes that Parties' products are off-patent, which enables generic manufacturers to enter and expand in the  market.
      Indeed, entry is feasible between six months and one year.[74] In addition, the large majority of  respondents  confirmed  that  entry  has
      occurred in Germany and Austria in the last three years. By means of example, Merck has introduced its product  Posatex  and  a  number  of
      generic products have also been introduced.[75]  In addition, they expect new entry in the next two to three years, including new  products
      on the pipeline by generic manufacturers.[76]

 120) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the  internal  market  on
      the market for otitis externa in Germany and in Austria, based on the above,  and  particularly  on  the  fact  that  (i)  the  competitive
      structure will not be significantly modified by the transaction because Elanco is already the market leader in both  Germany  and  Austria,
      the increment is limited, (particularly in Austria, [0-5]%) and significant competitors remain post-merger with market shares  higher  than
      those of NAH to which customers can easily switch; and, (ii) the Parties’ products are off-patent, generics exist, entry  has  occurred  in
      the past in both Germany and Austria and it is expected to take place in the and future, in spite of entry barriers, such  as  registration
      and product development, the need to have a superior product profile and facing competition form generics.

       The Czech Republic

 121) The replies from the market investigation did not indicate the Parties as market leaders[77] nor as particularly aggressive  or  innovative
      competitors.[78] As regards the question of whether Parties are close competitors[79] the market  investigation  was  not  conclusive.  The
      majority of respondents to the market investigation submitted that alternative suppliers for otitis externa products  exist  in  the  Czech
      Republic[80] and that customers easily switch suppliers in case of a price increase.[81] In addition, generics are  important  and  pose  a
      competitive constraint on the branded products. [82]

 122) Entry is feasible within six months to one year.[83] The majority of respondents to the market investigation submitted that there has  been
      entry in the last three years, including from generic companies[84] and that new entry is expected in the next two to three  years.[85]  In
      addition, one respondent submitted that the distribution companies have strong market position and pressure suppliers to  offer  discounts.
      [86]

 123) In addition, respondents to the market investigation confirmed that the merger will have little or no  impact  in  the  market  for  otitis
      externa in the Czech Republic. [87]

 124)  The Commission notes that in the last few years, the main competitors have grown significantly. Namely, Merck from [5-10]% in 2011 to [20-
      30]% in 2013 and Virbac expanded from [0-5]% to [10-20]% during the same two years. The fact that such an increase of  market  shares  (and
      the correspondent decrease of NAH's shares) occurred during the period in which NAH's product was not available due to licensing  problems,
      and such high fluctuation of market shares clearly illustrate the ability of  competitors  to  become  a  competitive  constraints  to  the
      Parties. The Commission considers that such ability of competitors to fill in a gap in the market is a natural event which demonstrates the
      degree of competitive pressures in the market for otitis externa in the Czech Republic.

 125) The Commission considers that, even when NAH's Surolan becomes available again, it would be difficult for the merging Parties to regain its
      market shares to the level of 2012. This is particularly so taking into account that:  (i)  the  Parties’  products  are  off-patent,  (ii)
      generics exist, (iii) entry has occurred in the past and it is  expected  to  take  place  in  the  future  and  (iv)  there  are  credible
      alternatives which can (and have in the recent past – when Surolan was not available) become a competitive constraint to  the  Parties.  As
      Surolan has been on backorder for more than one year, customers, and  in  particular  veterinarians,  were  already  forced  to  switch  to
      alternative products, as showed by the growth of the Parties' main competitors over the last year.

 126) Taking into account the results of the market investigation above, and in particular the fact that the Parties' overlapping activities only
      lead to a Group 1 market in 2012 but not in 2013 and that it would be difficult for Parties to regain market shares as there  are  credible
      alternatives which can (and have) become a competitive constraint to the Parties, the Commission concludes that  the  proposed  transaction
      does not raise serious doubts as to its compatibility with the internal market on the market for otitis externa in the Czech Republic.

1 Conclusion

 127) On this basis, the Commission concludes that the proposed transaction does not raise serious  doubts  as  to  its  compatibility  with  the
      internal market on the market for otitis externa antimicrobials in Germany, Austria and the Czech Republic.

5 Production Animals

 128) The transaction will lead to the following Group 1 markets for production animals: (i) oral /  pre-mix  antimicrobials  for  swine  in  the
      United Kingdom and in Denmark; (ii) oral antimicrobials for rabbits in Spain; and (iii) endoparasiticides for sheep in the  United  Kingdom
      and the Netherlands.

1 Oral / pre-mix antimicrobials for swine in the United Kingdom

 129) The combined market share of the Parties in the segment comprising all oral antimicrobials for swine in  the  United  Kingdom  is  [40-50]%
      (Elanco: [30-40]%; NAH: [5-10]%), as can be seen in table 17 below. Elanco is the market leader with [30-40]%, followed by Zoetis with [20-
      30]%, Huvepharma with [10-20]%, Novartis with [5-10]%, Ceva Santé Animale with [5-10]% and others with [5-10]%.  The  value  of  the  total
      market is EUR […].

   Table 17: Oral Antimicrobials for Swine (United Kingdom) 2013

|Manufacturer                 |Sales (EUR000 )           |Shares                    |
|Elanco                       |[…]                       |[30-40]%                  |
|Zoetis                       |[…]                       |[20-30]%                  |
|Huvepharma                   |[…]                       |[10-20]%                  |
|Novartis                     |[…]                       |[5-10]%                   |
|Ceva Santé Animale           |[…]                       |[5-10]%                   |
|Vétoquinol                   |[…]                       |[5-10]%                   |
|Dechra                       |[…]                       |[0-5]%                    |
|Eurovet                      |[…]                       |[0-5]%                    |
|Virbac                       |[…]                       |[0-5]%                    |
|Combined                     |[…]                       |[40-50]%                  |
|Total                        |[…]                       |100.0%                    |
|Source: Form CO,  Annex 8, version of 18 September 2014                           |

 130) The combined market share of the Parties in the alternative segment of only pre-mix  antimicrobials for swine in the United Kingdom is [50-
      60]% (Elanco: [40-50]%; NAH: [10-20]%), as can be seen in table 18 below. Elanco is the market leader with  [40-50]%,  followed  by  Zoetis
      with [20-30]%, Huvepharma with [10-20]%, Novartis with [10-20]%, Ceva Santé Animale with [5-10]% and others with [0-5]%. The value  of  the
      total market is EUR […]. In the United Kingdom, most oral antimicrobials are pre-mixes, with only EUR […] sales in  soluble  antimicrobials
      for swine.[88]

   Table 18: Oral Antimicrobials for Swine - Pre-mix only (United Kingdom) 2013

|Manufacturer                   |Sales (EUR 000)           |Shares                    |
|Elanco                         |[…]                       |[40-50]%                  |
|Zoetis                         |[…]                       |[20-30]%                  |
|Huvepharma                     |[…]                       |[10-20]%                  |
|Novartis                       |[…]                       |[10-20]%                  |
|Ceva Santé Animale             |[…]                       |[5-10]%                   |
|Vétoquinol                     |[…]                       |[0-5]%                    |
|Dechra                         |[…]                       |[0-5]%                    |
|Combined                       |[…]                       |[50-60]%                  |
|Total                          |[…]                       |100.0%                    |
|Source: Form CO,  Annex 8, version of 18 September 2014                              |

 131) The Parties sales in the United Kingdom are generated mainly by three products, Elanco's Tylan and Pulmotil and NAH's Denagard.

 132) Tylan is a macrolide using the active ingredient tylosin, indicated for swine, poultry and cattle.  Pulmotil is also a macrolide using  the
      active ingredient tilmicosin, also indicated for swine, poultry and cattle.  Denagard  is  a  pleuromutilin  using  the  active  ingredient
      tiamulin, indicated for swine, poultry and rabbits.

 133) As can be seen in table 19 below, the majority of the Parties' sales is generated from the pre-mix version  of  both  Tylan  and  Denagard.
      This is similar to competitors, such as Zoetis with Lincocin and Huvepharma with Pharmasin.

   Table 19: Oral Antimicrobials for Swine Parties’ and Selected Competitors’ Products (United Kingdom) 2013

|Manufacturer                   |Product Name                                 |Sales (EUR 000)                |
|Elanco                         | Tylan Pre-mix                               |[…]                            |
|                               |Pulmotil Pre-mix                             |[…]                            |
|                               |Apralan Pre-mix                              |[…]                            |
|                               |Tylan Soluble                                |[…]                            |
|                               |Pulmotil Soluble                             |[…]                            |
|                               |Apralan Soluble                              |[…]                            |
|Novartis                       |Denagard Pre-mix                             |[…]                            |
|                               |Denagard Soluble                             |[…]                            |
|                               |Econor Pre-mix                               |[…]                            |
|Zoetis                         |Aurofac Pre-mix                              |[…]                            |
|                               |Lincocin Pre-mix                             |[…]                            |
|                               |Lincospectin Soluble                         |[…]                            |
|                               |Lincocin Soluble                             |[…]                            |
|Huvepharma                     |Pharmasin Pre-mix                            |[…]                            |
|                               |Vetmulin Pre-mix                             |[…]                            |
|                               |Tilmovel Pre-mix                             |[…]                            |
|                               |Tylan Soluble                                |[…]                            |
|                               |Vetmulin Soluble                             |[…]                            |
|Vétoquinol                     |Synutrim Pre-mix                             |[…]                            |
|                               |Amoxinisol Soluble                           |[…]                            |
|Ceva, Dechra, Eurovet, Virbac  |Several                                      |[…]                            |
|Source: Reply to the RFI of 19 September 2014                                                                |

1 The Notifying Party's views

 134) The Notifying Party argues that there are a number of competitors in this market, such as Zoetis, Virbac, Ceva, Huvepharma, Vétoquinol  and
      Dechra. NAH is small, with only [10-20]% share.  It is merely the fourth largest competitor, followed closely by Ceva with [5-10]%.  Zoetis
      and Huvepharma are both larger players, with [20-30]% and [10-20]% respectively.

 135) In addition, all of the Parties' antimicrobials are off-patent and face strong competition from companies supplying antimicrobials based on
      the Parties' respective active ingredients.

 136) The Notifying Party also argues that the Parties' products are not close competitors. The Notifying Party argues that Tylan  is  no  longer
      being indicated for dysentery, where Denagard is mainly used.  Similarly, Denagard, though still indicated, is no  longer  materially  used
      for ileitits, where Tylan is mainly used.

 137) Finally, the Notifying Party argues that it is not relevant to focus on particular species of production animals because antimicrobials, in
      particular those administered orally, are indicated for a wide variety of species.

 138) Thus, the combined firm's share in this narrow segment could not translate into a price increase. Not only is there strong competition even
      within this segment, farmers choose among alternative modes of administration which exert still additional competition.  Moreover,  because
      Parties' products are used for other species than swine and in different forms of administration (such as injectables), there is no  reason
      to believe the combined firm could raise price without losing sales in those other areas.

2 The results of the market investigation and the Commission's assessment

 139) The respondents to the market investigation submit that both Parties are considered among the market leaders in the market for oral /  pre-
      mix antimicrobials for swine in the United Kingdom together with other suppliers such as Zoetis, Huvepharma,  and  ECO.[89]   Additionally,
      the respondents to the market investigation submit that these represent alternative suppliers to the merged entity, together  with  Virbac,
      Univet, KRKA, Lavet and MSD.[90]

 140) One respondent to the market investigation submits that the transaction would generate a dominant position in  the  market  for  pre-mixes,
      where the combined market share goes close to [50-60]% in volume and higher in value.[91]  In addition, another respondent  to  the  market
      investigation argued that Elanco is the leader of the macrolides molecules, whereas NAH is the leader of pleuromutilins molecules.  On this
      basis, both are the major alternatives to treat most swine enteric diseases.[92]

 141) In relation to NAH's competitive position, the respondents to the market  investigation  submit  that  NAH  is  not  widely  considered  as
      innovative or aggressive and […].

 142) The Commission notes that the Parties face competition from a number of competitors, including generics manufacturers  such  as  Huvepharma
      and that barriers to entry are relatively low as the Parties' products are off-patent.

 143) In relation to closeness of competition, the responses to the market investigation were inconclusive  in  relation  to  whether  Tylan  and
      Denagard are both used for ileitis and / or dysentery.  Some respondents consider that they are used for "similar diseases" whereas  others
      consider that they are used for different diseases. [93]

 144) The Commission notes that NAH has pleuromutilin based drugs (Denagard and Econor), whereas Elanco has macrolites  based  drugs  (Tylan  and
      Pulmotil).

 145) Denagard is primarily marketed, sold and used to treat dysentery  and  mixed  enteric  infections  (colitis)  that  include  dysentery.[94]
      Denagard is within the class of pleuromutilin drugs which have become "the only potentially  effective  choice  among  antimicrobials  with
      swine dysentery as authorized indication".[95]

 146) Tylan is not effective against dysentery.  The European Medicines Agency’s Committee for Medicinal Products for Veterinary Use  (EMA  CVMP)
      recently ordered the deletion of swine dysentery from the label of all tylosin products such as Tylan.[96] In contrast, Tylan is  primarily
      marketed, purchased and used to prevent and treat ileitis (also known as porcine enteropathy), a different intestinal disease.[97] Denagard
      is indicated for treatment but, unlike Tylan, not prevention.  Yet, even its use for treatment is limited and decreasing because  customers
      need it for dysentery.[98]  Using it for the more common ileitis would cause swine to become resistant to the  active  ingredient  tiamulin
      and thus preclude its effectiveness when needed for dysentery. If resistance was developed, pig farmers would have no way  to  treat  swine
      dysentery because there are no alternatives to pleuromutilins to treat it.

 147) These concerns lead the EMA CVMP to adopt a Reflection Paper in February  2014,[99]   recommending  that  tiamulin  be  restricted  to  the
      treatment of animals already diagnosed with a disease or for metaphylaxis (a mass medication for an imminent outbreak).  According  to  the
      CVMP, tiamulin should only exceptionally be used as a prophylactic (i.e. for prevention) as part of well-defined  and  restricted  in  time
      eradication programs for swine dysentery. These limitations preclude general use of Denagard to prevent recurring diseases like ileitis. In
      contrast, ileitis is Tylan’s primary indication and main field of use.

 148) In addition, the Commission considers that the Parties face competitive constraints  from  generic  products  which  use  the  same  active
      ingredients. These generic products are closer to each Party than the Parties are with each other, as  discussed  in  paragraphs  (143)  to
      (147) above.

 149) Moreover, the Commission considers that the post-merger, the combined entity will not have  the  ability  to  raise  prices.  The  Parties'
      products can be used for several species beside swine.  In particular, a number of oral antimicrobials are  sold  in  pre-mix  and  soluble
      forms. The pre-mix forms are mainly used for swine, whereas the soluble forms are mainly used for poultry. There is a high degree of supply
      substitution between pre-mix and soluble.  Almost all companies supply both modes of administration, including but not limited  to  Elanco,
      NAH, Zoetis, Huvepharma, Vétoquinol and Dechra. The same active ingredient can, and is often, used on both modes  of  administration.   For
      instance, all of Elanco's active ingredients are sold as both premix and solubles (i.e. Tylan, Pulmotil and Apralan).  The same is true for
      NAH's Denagard, Zoetis' Lincospectin and Lincosin and Huvepharma's Tylosin, Vetmulin and Tilmovet. In addition,  Zoetis'  pre-mix  product,
      Aurofac, is used about equally for both swine and poultry.  Aurofac, one of the most successful pre-mix antimicrobial for swine  with  very
      high sales, is priced to compete for poultry customers as well as swine.  This would eliminate the incentive for Parties to raise prices in
      the narrower segment for swine, as this would mean losing sales to Zoetis and to other competitors in soluble antimicrobials.

 150) Finally, the Commission notices that the active ingredient is off-patent and generics exist in this  market.  Moreover,  Huvepharma  is  an
      example of successful generic entry, which has achieved a current market share of [10-20]% on the basis of active ingredients which are the
      same as Denagard and Tylan. It is notable that Huvepharma has consistently grown by [0-5]% per year, from [10-20]% in 2011 to  [10-20]%  in
      2013 while both Elanco and NAH have lost market shares. Ceva has grown even more dramatically, from [0-5]% in 2011 to [5-10]% in 2013.

3 Conclusion

 151) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the internal  market   on
      the market for oral antimicrobials, or on an alternative segment of pre-mix only antimicrobials, for swine in the United Kingdom, based  on
      the above, and particularly on (i) the recent decision of EMA CVMP as regards the use of tiamulin products, which make the main products of
      the Parties no longer substitutable, (ii) fact that there are various alternative competitors which will continue to  exercise  competitive
      constraint on the merged entity post-merger and that the Parties’ products are off-patent and generics exist, (iii) the fact that entry has
      occurred in recent past years, (iv) the lack of incentives to increase prices in the narrower segment for swine and (v) the high degree  of
      supply substitution between pre-mixes and soluble products.

2 Oral / pre-mix antimicrobials for swine in Denmark

 152) The combined market share of the Parties in the segment comprising all oral antimicrobials for swine in the Denmark  is  [20-30]%  (Elanco:
      [10-20]%; NAH: [10-20]%) and therefore it gives no raise to a Group 1 market.

 153) However, in the segment comprising only pre-mix (oral) antimicrobials for swine in the Denmark the combined market share of the Parties  is
      [40-50]% (Elanco: [30-40]%; NAH: [10-20]%), as can be seen in table 20 below.

   Table 20: Oral Antimicrobials for Swine - Pre-mix only (Denmark) 2013

|Manufacturer               |Sales (EUR 000 )           |Shares                     |
|Elanco                     |[…]                        |[30-40]%                   |
|Huvepharma                 |[…]                        |[20-30]%                   |
|Novartis                   |[…]                        |[10-20]%                   |
|Orion                      |[…]                        |[10-20]%                   |
|Virbac                     |[…]                        |[5-10]%                    |
|Salfarm                    |[…]                        |[5-10]%                    |
|Combined                   |[…]                        |[40-50]%                   |
|Total                      |[…]                        |100.0%                     |
|Source: Form CO,  Annex 8, version of 18 September 2014                           |

 154) In relation to pre-mix antimicrobials for swine in Denmark, Elanco is the market leader with [30-40]%, followed  by  Huvepharma  with  [20-
      30]%, Novartis with [10-20]%, Orion with [10-20]%, Virbac with [5-10]% and Salfarm with [5-10]%. The value of the total market is only  EUR
      […]. In Denmark, most oral antimicrobials are solubles, rather than pre-mixes. As can be seen in table 21 below, the majority of  sales  of
      oral antimicrobials for swine in Denmark are in soluble form, with relatively low sales of pre-mixes.  This situation is  the  opposite  of
      the situation in the United Kingdom.

   Table 21: Oral Antimicrobials for Swine Parties’ and Selected Competitors’ Products (Denmark) 2013

|Manufacturer           |Products              |Sales (EUR 000)     |
|Elanco                 |Tylan Pre-mix         |[…]                  |
|                       |Tylan Soluble         |[…]                  |
|Novartis               |Denagard Pre-mix      |[…]                  |
|                       |Denagard Soluble      |[…]                  |
|Orion                  |Lincomix Pre-mix      |[…]                  |
|                       |Lincospectin Pre-mix  |[…]                  |
|                       |Linco-spectin Soluble |[…]                  |
|Huvepharma             |Tylmasin Pre-mix      |[…]                  |
|                       |Vetmulin Pre-mix      |[…]                  |
|                       |Tilmovet Soluble      |[…]                  |
|                       |Tiamulin Soluble      |[…]                  |
|                       |Tylosin Soluble       |[…]                  |
|Decra, Ceva,           |Several               |[…]                 |
|Scanimalhealth, BI and |                      |                    |
|Others                 |                      |                    |
|Source: Reply to the RFI of 19 September 2014                      |

 155) As can be seen in table 21 above, the Parties sales in Denmark are generated mainly by two products, Elanco's Tylan and NAH's Denagard.

1 The Notifying Party's views

 156) In addition to the arguments in section 4.5.1.1 in relation to the United Kingdom, the Notifying Party  argues  that  in  Denmark,  farmers
      administer oral antimicrobials almost exclusively in soluble form and therefore do not use pre-mixes, but simply spread over  the  finished
      feed, (top-dressing).

 157) The Notifying Party argues that in countries where the government encourages the use of alternatives to antimicrobials (such as  vaccines),
      Elanco's Tylan faces strong competition from a vaccine by Boehringer Ingelheim called Enterisol.

2 The results of the market investigation and the Commission's assessment

 158) In order to reverse the trend of the constantly increasing antibiotic consumption in the pig production and the risk  posed  by  increasing
      antibiotic resistance, the Danish Veterinary and Food  Administration  has  issues  some  special  provisions  in  order  to  decrease  the
      consumption of antibiotics in swine.[100]

 159) The respondents to the market investigation confirm that the market for pre-mix antimicrobials in Denmark is  almost  non-existent  due  to
      these regulatory restrictions. According to the respondents to the market investigation, competition is wider than in other countries.[101]

 160) One respondent to the market investigation argued that the merger would generate a dominant position in the market for oral  antimicrobials
      in Denmark. Another competitor expressed the concern that the merged entity would control the two most widely used feed additives (Denagard
      and Tylan), which also represent the two largest and best regarded brands in the market.[102]

 161) The Commission considers that post-merger, five competitors will continue to compete in oral antimicrobials for swine. This includes  large
      multinational companies such as Zoetis, Huvepharma and Orion.  In addition, the  Parties  products  are  off-patent  and  face  competitive
      constraint from generics manufacturers with the same active ingredient as Tylan and Denagard, such as Huvepharma.

 162) Moreover, as discussed above in paragraphs (143) to (147) the Parties main products, Tylan and Denagard focus on different diseases and are
      not close competitors.

3 Conclusion

 163) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the internal  market   on
      the market for  oral / pre-mix antimicrobials for swine in Denmark, based on the above, and particularly on (i) the fact  the  Parties  are
      not close competitors, (ii) the legal limitation for the usage of antimicrobials for swine in Denmark and therefore the limited size of the
      market, (iii) the existence of other competitors that shall continue to exercise a competitive constraint the merged entity, (iv) the  fact
      that other competitors are active on this market and that the Parties’ products are off-patent and generics exist.

3 Oral antimicrobials for rabbits in Spain

 164) As can be seen in table 22 below, The Parties will have a combined market share of [40-50]% in  the  segment  of  oral  antimicrobials  for
      rabbits in Spain. Elanco is the market leader with [20-30]%, followed by NAH with [20-30]%, Pintaluba with [10-20]%, and  Calier  with  [5-
      10]%. The remaining [20-30]% is dispersed between other smaller market participants. The market for  oral  antimicrobials  for  rabbits  in
      Spain is very small in value, at EUR […].

                                              Table 22: Oral Antimicrobials for Rabbits (Spain) 2013

|Manufacturer          |Sales (EUR 000)         |Shares                 |
|Elanco                |[…]                     |[20-30]%               |
|NAH                   |[…]                     |[20-30]%               |
|Pintaluba             |[…]                     |[10-20]%               |
|Calier                |[…]                     |[5-10]%                |
|Others                |[…]                     |[20-30]%               |
|Combined              |[…]                     |[40-50]%               |
|Total                 |[…]                     |100%                   |
|Source: Form CO, version of 11 September 2014                          |

 165) If the Commission includes in its calculations the market shares for Zoetis' products which are used off-label for rabbits as can  be  seen
      in table 23 below, then the Parties will have a combined market share of [40-50]% in the segment of  oral  antimicrobials  for  rabbits  in
      Spain. Elanco is the market leader with [20-30]%, followed by NAH with [20-30]%, Pintaluba with [10-20]%,  and  Calier  with  [5-10]%.  The
      remaining [30-40]% is dispersed between other smaller market participants. The market for oral antimicrobials for rabbits in Spain is  very
      small in value, at EUR […].

   Table 23: Oral Antimicrobials for Rabbits Spain 2013 (including Zoetis’ products used off-label)

|Manufacturer          |Sales (EUR 000)         |Shares                 |
|Elanco                |[…]                     |[20-30]%               |
|NAH                   |[…]                     |[20-30]%               |
|Pintaluba             |[…]                     |[10-20]%               |
|Calier                |[…]                     |[5-10]%                |
|Zoetis                |[…]                     |[5-10]%                |
|Others                |[…]                     |[20-30]%               |
|Combined              |[…]                     |[40-50]%               |
|Total                 |[…]                     |100%                   |
|Source: Reply to the RFI of 19 September 2014                          |

1 The Notifying Party's views

 166) The Notifying Party argues that there are at least five players in this narrow sub-segment and that the sales of each party are  less  than
      EUR […].

 167) The Notifying Party argues that it is  not  relevant  to  focus  on  particular  species  of  production  animals  because  antimicrobials,
      particularly those administered orally, are indicated for a wide variety of species. Products used for rabbits are identical to those  used
      for other species and in larger quantities which precludes any potential competitive concern.

 168) Finally, the Notifying Party argues that the market shares do not include additional products used for rabbits off-label, such  as  Zoetis'
      Lincospectin and Lincomix. With the addition of these off-label products, the market shares drop slightly to [40-50]%.

2  The results of the market investigation and the Commission's assessment

 169) One respondent to the market investigation expressed the concern that the merger would generate a dominant position in the market for  oral
      antimicrobials for rabbits in Spain, with the combination of Tilmovet, Apralan and Vetmulin.  However,  other  respondents  to  the  market
      investigation submitted that there are other competitors in the market for oral antimicrobials for  rabbits  in  Spain,  such  as  Karizoo,
      Esteve, Ceva and Calier.[103]

 170) In Schering Plough / Organon Biosciences[104] the Commission mentioned that there is insufficient demand for economical mass-production  of
      animal health products aimed at other individual species than the main production animal and companion animal species  (such  as  rabbits).
      Where demand for animal health products for such species is not met by  local  production  (often  by  veterinarians  themselves  or  local
      laboratories) vaccines or pharmaceutical products developed for other species are often used (with  dosage  adapted  to  the  mass  of  the
      animal).

 171) The Commission notes that most oral antimicrobials used in rabbits are indicated for several species. For example, this  is  the  case  for
      NAH's Denagard (which is indicated for swine, poultry and rabbits) and Econor (swine and rabbits). It is also true  for  Elanco’s  Pulmotil
      (swine and rabbits) as well as competitors’ products, such as Oxiteve (swine and rabbits), Ganamix Colistin (swine,  poultry  and  rabbits)
      and Caliermutin (swine and rabbits).

 172) The Commission notes that all oral antimicrobials which are indicated for rabbits are also indicated for other species, mainly  swine.  For
      example, Elanco's Pulmotil and Apralan are also indicated for swine.  For example, only [20-30]% of  Pulmotil  (pre-mix)  and  [30-40]%  of
      Apralan (pre-mix) is sold for rabbit, with the remaining [80-90]% and [70-80]% respecively sold for swine.   Similarly,  only  [10-20]%  of
      Denagard (pre-mix) is sold for rabbit, with [90-100]% sold  for  swine.  Other  competitors  also  have  cross-species  products,  such  as
      Pintaluba's Apsamix Tiamulina and Apsamix Colistina, Calier's Caliermutin and Tilmovet and Zoetis' Lincospectin (soluble and  pre-mix)  and
      Lincomix (pre-mix). On this basis, the combined firm could not increase the prices of these products in rabbits because it would lose sales
      from customers that use these products for swine.

 173) The respondents suppliers to the market investigation submit that they do not track data specific for rabbits and  that  neither  Party  is
      reporting sales in relation to antimicrobials for rabbits.[105]  The reporting organisation CEESA also does not report data by species. For
      example, Tylan pre-mix is categorised under "Other large ruminants" while Tylan soluble  and  Pulmotil  are  allocated  under  "other  food
      producing animals".  Nor, does CEESA attempt to allocate sales of multi-species products to  individual  species.   When  narrower  species
      categories exist, the entire product sales are allocated into a single category.

 174) Moreover, as regards the closeness of competition between the Parties, one supplier indicated that Tiamulin is being more used for  enteric
      disorders and Tilmicosin for respiratory disease.[106]

 175) The respondents to the market investigation have also confirmed the existence of generic products[107] and that a new entry is expected  in
      the near future.[108]

3 Conclusion

 176) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the internal  market   on
      the market for  oral antimicrobials for rabbits in Spain, based on the above, and particularly on (i) the lack of incentives of the Parties
      to increase prices in a narrow segment for rabbits as long as the same products are used for several species (ii) the lack of closeness  of
      competition, (iii) the existence of alternative competitors, (iv) the fact that new entry is expected in the following few  years  and  (v)
      the fact that the Parties’ products are off-patent and generics exist.

4 Endoparasiticides for sheep in the United Kingdom

 177) The combined market shares of the Parties in the market for endoparasiticides for sheep in the United Kingdom are  [60-70]%  (Elanco:  [20-
      30]%; NAH: [30-40]%), as can be seen in table 24 below. NAH is the market leader with [30-40]%, followed by Elanco  with  [20-30]%,  Merial
      with [5-10]%, Merck with [5-10]%, Norbrook with [5-10]% and others with [10-20]%. The value of the total market is only EUR […].

   Table 24: Endoparasiticides for Sheep (United Kingdom) 2013

|Manufacturer            |Sales (EUR 000)          |Shares                       |
|NAH                     |[…]                      |[30-40]%                     |
|Elanco                  |[…]                      |[20-30]%                     |
|Merial                  |[…]                      |[5-10]%                      |
|Merck                   |[…]                      |[5-10]%                      |
|Norbrook                |[…]                      |[5-10]%                      |
|Chanelle                |[…]                      |[0-5]%                       |
|Zoetis                  |[…]                      |[0-5]%                       |
|Bimeda                  |[…]                      |[0-5]%                       |
|Virbac                  |[…]                      |[0-5]%                       |
|Ceva                    |[…]                      |[0-5]%                       |
|Other                   |[…]                      |[5-10]%                      |
|Combined                |[…]                      |[60-70]%                     |
|Total                   |[…]                      |100%                         |
|Source: Form CO, version of 11 September 2014                                   |

 178) On the alternative wider market for endo / endecto, the combined market shares of the Parties are [50-60]%  (Elanco:  [20-30]%;  NAH:  [20-
      30]%), as can be seen in table 25 below. NAH is the market leader with [20-30]%, followed by Elanco with [20-30]%,  Zoetis  with  [10-20]%,
      Merial with [5-10]%, Norbrook with [5-10]% and others with [10-20]%. The value of the total market is only EUR […].

   Table 25: Endoparasiticides / Endectocides for sheep (United Kingdom) 2013

|Manufacturer            |Sales (EUR 000)           |Shares                 |
|NAH                     |[…]                       |[20-30]%               |
|Elanco                  |[…]                       |[20-30]%               |
|Zoetis                  |[…]                       |[10-20]%               |
|Merial                  |[…]                       |[5-10]%                |
|Norbrook                |[…]                       |[5-10]%                |
|Merck                   |[…]                       |[0-5]%                 |
|Chanelle                |[…]                       |[0-5]%                 |
|Bimeda                  |[…]                       |[0-5]%                 |
|Virbac                  |[…]                       |[0-5]%                 |
|Ceva                    |[…]                       |[0-5]%                 |
|Other                   |[…]                       |[5-10]%                |
|Combined                |[…]                       |[50-60]%               |
|Total                   |[…]                       |100%                   |
|Source: Form CO,  Annex 8, version of 18 September 2014                    |

 179) Should the market be split by targeted pathology into flukes and nematodes, in the  nematodicides segment the combined market shares of the
      Parties would reach [50-60]% (Elanco: [20-30]%; NAH: [30-40]%), as can be seen in table 26 below. NAH is the market leader  with  [30-40]%,
      followed by Elanco with [20-30]%, Zoetis with [20-30]%, Merial with [5-10]%, Norbrook with [5-10]% and others with [10-20]%. The  value  of
      the total market is only EUR […].

   Table 26: Nematodicides for sheep (United Kingdom) 2013

|Manufacturer                  |Sales (EUR 000)               |Shares                        |
|NAH                           |[…]                           |[30-40]%                      |
|Elanco                        |[…]                           |[20-30]%                      |
|Zoetis                        |[…]                           |[20-30]%                      |
|Merial                        |[…]                           |[5-10]%                       |
|Norbrook                      |[…]                           |[5-10]%                       |
|Merck                         |[…]                           |[0-5]%                        |
|Chanelle                      |[…]                           |[0-5]%                        |
|Virbac                        |[…]                           |[0-5]%                        |
|Bimeda                        |[…]                           |[0-5]%                        |
|Others                        |[…]                           |[5-10]%                       |
|Combined                      |[…]                           |[50-60]%                      |
|Total                         |[…]                           |100%                          |
|Source: Form CO,  Annex 8, version of 18 September 2014                                      |

 180) Similarly, on the Flukicides segment, the combined market shares of the Parties are [60-70]% (Elanco: [20-30]%; NAH: [40-50]%), as  can  be
      seen in table 27 below. NAH is the market leader with [40-50]%, followed by Elanco with [20-30]%, Norbrook with [5-10]%,  Merial  with  [5-
      10]%, Zoetis with [0-5]% and others with [10-20]%. The value of the total market is only EUR […].

   Table 27: Flukicides for sheep (United Kingdom) 2013

|Manufacturer                  |Sales (EUR 000)               |Shares                        |
|NAH                           |[…]                           |[40-50]%                      |
|Elanco                        |[…]                           |[20-30]%                      |
|Norbrook                      |[…]                           |[5-10]%                       |
|Merial                        |[…]                           |[5-10]%                       |
|Zoetis                        |[…]                           |[0-5]%                        |
|Chanelle                      |[…]                           |[0-5]%                        |
|Merck                         |[…]                           |[0-5]%                        |
|Bimeda                        |[…]                           |[0-5]%                        |
|Virbac                        |[…]                           |[0-5]%                        |
|Others                        |[…]                           |[5-10]%                       |
|Combined                      |[…]                           |[60-70]%                      |
|Total                         |[…]                           |100%                          |
|Source: Form CO,  Annex 8, version of 18 September 2014                                      |

   1 The Notifying Party's views

 181) The Notifying Party argues that looking only into endoparasiticides for sheep reflects an incomplete picture.  Endoparasiticides for  sheep
      compete against endectocides which are equally effective against internal parasites. Customers can  and  do  use  both  types  of  products
      interchangeably to treat internal worms with no significant difference in effectiveness, duration or withdrawal period.

 182) In the combined market for endoparasiticides and endectocides for sheep in the United Kingdom, the Notifying Party argues  that  there  are
      many players competing and that players can expand by shifting the same products from cattle to sheep. Moreover, since several  Elanco  and
      NAH products indicated for sheep are also indicated for cattle, they must be priced to compete in that highly competitive space.

 183) The Notifying Party argues, furthermore, that Elanco's products do not compete closely with NAH's products, in terms of  scope,  withdrawal
      period and results.

 184) For example, the Notifying Party argues that Elanco's Supaverm  has  a  very  broad  therapeutic  scope,  covering  roundworms,  lungworms,
      tapeworms, liver flukes, nasal bot flies and ticks. NAH has no product in its portfolio that combines all these indications.  Supaverm also
      has a longer withdrawal period (65 days) compared to NAH's products which have an average withdrawal period of 22 days.  Finally,  Elanco's
      Flukiver is not competing closely with NAH's flukicides because it targets only flukes of at least five weeks of age.  By  contrast,  NAH's
      products can kill flukes which are less than five weeks old.

2 The results of the market investigation and the Commission's assessment

 185) The respondents to the market investigation submit that the most important competitors in endoparasiticides for sheep in the United Kingdom
      are Zoetis with Cydectin and Dectomax, Elanco with Supaverm and Flukiver  and  Norbrook  with  Levafas.  Some  respondents  to  the  market
      investigation submit that the Parties are close competitors, with both companies making oral wormers, flukicides and  combinations  thereof
      with products overlapping in anthelmintic classes, spectrum of activity and duration of action.[109] However, the respondents to the market
      investigation identified a number of competitors which would continue to constrain the merged entity post-merger.

   Table 28: Endoparasiticides for Sheep (United Kingdom) 2013

|Manufacturer            |Product Name                   |Sales (EUR 000)                            |
|Elanco                  |Flukiver                       |[…]                                        |
|                        |Supaverm                       |[…]                                        |
|                        |Ovispec                        |[…]                                        |
|Novartis                |Fasinex                        |[…]                                        |
|                        |Fasimec                        |[…]                                        |
|                        |Endex                          |[…]                                        |
|                        |Allverm                        |[…]                                        |
|                        |Levitape                       |[…]                                        |
|                        |Rycoben                        |[…]                                        |
|                        |Zolvix                         |[…]                                        |
|Merck                   |Panacur                        |[…]                                        |
|                        |Levacur                        |[…]                                        |
|                        |Zanil                          |[…]                                        |
|Merial                  |Trodax                         |[…]                                        |
|Norbrook                |Fenzol                         |[…]                                        |
|                        |Levacide                       |[…]                                        |
|                        |Levafas                        |[…]                                        |
|                        |Parafend                       |[…]                                        |
|                        |Triclafas                      |[…]                                        |
|Chanelle                |Albacert                       |[…]                                        |
|                        |Abex                           |[…]                                        |
|                        |Bovex                          |[…]                                        |
|                        |Chanaverm                      |[…]                                        |
|                        |Tribex                         |[…]                                        |
|                        |Triclacert                     |[…]                                        |
|                        |Zerofen                        |[…]                                        |
|Bimeda                  |Endofluke                      |[…]                                        |
|                        |Endospec                       |[…]                                        |
|Zoetis                  |Cydectin Triclamox             |[…]                                        |
|Virbac                  |Albenil                        |[…]                                        |
|Ceva                    |Douvistome                     |[…]                                        |
|Others                                                  |[…]                                        |
|Source: Reply to the RFI of 19 September 2014                                                        |

 186) As can be seen in table 28 above, the majority of sales of endoparasiticides for sheep in the United Kingdom are in Elanco's  Flukiver  and
      Supaverm, Novartis' Fasimec, Endex and Rycoben and Merial's Trodax.

 187) In addition, most active substances contained in endoparasiticides for sheep are off-patent, which enables generic manufacturers  to  enter
      and expand in the market.  By way of example, generic competitors Norbrook, Channelle and Bimeda account for over [10-20]% of the market in
      the United Kingdom. One competitor submits that in the United Kingdom there is a large number of generic entrants which has driven  margins
      low.[110] The respondents to the market investigation submit that generics in this market are important and place a competitive  constraint
      on the branded products.

 188) In relation to switching, one  respondent  argues  that  where  alternative  brands  with  similar  indications,  product  characteristics,
      anthelmintic class groupings are available, customers may switch but often show allegiance, at least for a time, to the product  they  have
      traditionally used. Switching will be driven by the price differentials but also by the company reputation (and wider product range) of the
      other supplier. Dosing volume, route and withdrawal times will also impact on a decision.[111]

 189) In relation to buyer power, some respondents to the market investigation argue that the customers  are  strong  and  have  the  ability  to
      influence prices. At the retail level a small number of retailers control the majority  of  purchases.  The  largest  of  these  have  some
      influence on their purchasing price but critically a huge influence on price at farm level, due to improved pricing and ability to maintain
      smaller margins due to the scale of their operation.[112]

 190) The Commission notes that several of the Parties' products, including products that treat flukes and nematodes are indicated for both sheep
      and cattle. For example, Elanco's Flukiver and NAH's Fasinex and Endex are all indicated for sheep and cattle.  For example, only  [20-30]%
      of Fasinex is sold for sheep, with the remaining [70-80]% sold for cattle.  Similarly, other competitors also have cross-species  products,
      such as Merck's Panacur and Zanil, Merial's Trodax,  Norbrook's  Fenzol,  Lavacide,  Levafas  and  Parafend  and  Chanelle's  Abex,  Bovex,
      Chanaverm, Tribex, Triclacert and Zerofen. On this basis, the combined firm could not increase the prices  of  these  products  because  it
      would lose sales from customers that use these products for cattle.

 191) All of these products are indicated for a number of worms, including liver flukes and (with  the  exception  of  Fasinex)  nematodes  (i.e.
      roundworms).  In fact, all of the Parties products are indicated for a combination of worms, such as round, gape, lung, tape, caecal, liver
      flukes, nasal bot flies (and to some limited extent external ticks).  The only exception is Fasinex  which  is  only  indicated  for  liver
      flukes.

 192) For example, only [20-30]% of Supaverm are in relation to the treatment of flukes, with the remaining [80-90]% estimated for the  treatment
      of other worms.  Similarly, for almost all of NAH's products, Endex, Allverm, Rycoben and Fasimec, the estimated sales  attributed  to  the
      treatment of flukes range between 10-20%, with the remaining sales allocated to other  worms.   Similarly,  [50-60]%  of  Zoetis'  Cydectin
      Triclamox and Norbrook's Levafas are allocated for the treatment of flukes, with the remaining [50-60]%  estimated  for  the  treatment  of
      other worms.

 193) In relation to the narrower segments of flukicides and nematodicides, there are  other  competitors,  such  as  Norbrook,  Merial,  Zoetis,
      Chanelle, Merck, Bimeda and Virbac.  These competitors have products with the same  active  ingredients  as  NAH  and  Elanco's  respective
      products and are closer substitutes.  For example, Norbrook's Triclafas Drench competes more closely with NAH, while Norbrook's Closamectin
      injection competes more closely with Elanco.

 194) In relation to barriers to entry, at the broader market level, there have been many entrants using ivermectin based  products,  the  active
      ingredient which is the base of NAH's Fasimec.[113] In the last three years Zoetis  has  introduced  Startect,  an  oral  endoparasiticides
      active against worms only. Other recent entrants have been Epizero by Norbrook, Robonex (Dawnland) by Norbrook and the relaunch of Zanil by
      Ceva.  Market respondents expect that several generic products shall be launched in the future.

 195) One respondent to the market investigation argues that flukicides have seen little generic activity because of the scarcity of  the  active
      ingredient and because the relative cost of making a generic product for sheep is greater than for cattle or multi-species products.

 196) The Commission notes that the Parties flukicides do not overlap in active ingredients.  Also, all of the active ingredients  for  fluke  in
      the UK are off-patent and there are many generic suppliers (such as Channelle, Norbrook, Tulivin Laboratories, Bimeda, Eco).

 197) In nematodicides, the Parties only overlapping active ingredient is ivermectin, which is used by a number of competing  products,  such  as
      Chanelle's Animec, Chanimec and Topimec, Norbrook's Closamectin and Closiver, Bimeda's Bimectin, Eco's Econmectin, Merial's Ivomec Classic,
      Norbrook's Noromectin drench and Noromectin injection.  With the exception of monepantel, all of  the  active  ingredients  used  to  treat
      nematodicides are off-patent.  A number of generic manufacturers have  entered  the  United  Kingdom  market  in  recent  years  (Chanelle,
      Norbrook, Bimeda, Eco etc).

3 Conclusion

 198) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the internal  market   on
      the endoparasiticides for sheep in the United Kingdom, based on the above, and particularly on (i) the lack of incentives of the Parties to
      increase prices only in this segment as long as the same products are used for several species (ii) the lack of closeness  of  competition,
      (iii) the existence of alternative competitors, (iv) the fact new entry has occurred in past years, and (v)  the  fact  that  the  Parties’
      products are off-patent and generics exist.

5 Endoparasiticides for sheep in the Netherlands

 199) The combined market shares of the Parties in the market for endoparasiticides for sheep in the Netherlands are [40-50]% (Elanco:  [10-20]%;
      NAH: [20-30]3%), as can be seen in table 29 below. NAH is the market leader with [20-30]%, followed by Elanco with [10-20]%, Merck with [10-
      20]%, Bayer with [10-20]%, Zoetis with [0-5]% and others with [20-30]%. The value of the total market is only EUR […].

   Table 29: Endoparasiticides for sheep (Netherlands) 2013

|Manufacturer           |Sales (EUR 000)                 |Shares                    |
|NAH                    |[…]                             |[20-30]%                  |
|Elanco                 |[…]                             |[10-20]%                  |
|Merck                  |[…]                             |[10-20]%                  |
|Bayer                  |[…]                             |[10-20]%                  |
|Zoetis                 |[…]                             |[0-5]%                    |
|Other                  |[…]                             |[20-30]%                  |
|Combined               |[…]                             |[40-50]%                  |
|Total                  |[…]                             |100%                      |
|Source: Form CO version of 11 September 2014                                       |

 200) On the alternative wider market for endo / endecto antimicrobials for sheep the combined market shares of the Parties  do  not  lead  to  a
      Group 1 market.

 201) Should the market be split by targeted pathology into flukes and nematodes, in the  nematodicides segment for sheep in the Netherlands  the
      combined market shares of the Parties would not lead to a Group 1 market.

 202) On the other hand, in the market for flukicides for sheep in the Netherlands, the combined  market  shares  of  the  Parties  are  [70-80]%
      (Elanco: [30-40]%; NAH: [40-50]%), as can be seen in table 30 below. NAH is the market leader with [40-50]%, followed by Elanco  with  [30-
      40]%, Zoetis with [0-5]% and others with [20-30]%. The Commission notes that the value of the total market is only EUR […].

   Table 30: Flukicides for Sheep (Netherlands) 2013

|Manufacturer                  |Sales (EUR 000)               |Shares                        |
|NAH                           |[…]                           |[40-50]%                      |
|Elanco                        |[…]                           |[30-40]%                      |
|Zoetis                        |[…]                           |[0-5]%                        |
|Others                        |[…]                           |[20-30]%                      |
|Combined                      |[…]                           |[70-80]%                      |
|Total                         |[…]                           |100%                          |
|Source: Form CO, Annex 8, version of 18 September 2014                                       |

1 The Notifying Party's views

 203) The Notifying Party submits the same arguments as in section 4.5.4.1 above in relation to the United Kingdom.

2 The results of the market investigation and the Commission's assessment

 204) The respondents to the market investigation submit that the most important competitors in endoparasiticides for companion  animals  in  the
      Netherlands are Elanco and Novartis, Merial, Merck and Bayer.  If endectocides are included, then the main  competitors  are  Novartis  and
      Elanco, Merial, Merck and Zoetis.[114]

 205) In addition, most active substances contained in endoparasiticides for sheep are off-patent, which enables generic manufacturers  to  enter
      and expand in the market.

   Table 31: Endoparasiticides for sheep (Netherlands) 2013

|Manufacturer           |Product                        |Sales (EUR 000)                            |
|Elanco                 |Flukiver                       |[…]                                        |
|Novartis               |Fasinex                        |[…]                                        |
|                       |Endex                          |[…]                                        |
|Merck                  |Panacur                        |[…]                                        |
|Bayer                  |Rintal                         |[…]                                        |
|Zoetis                 |Cydectin Triclamox             |[…]                                        |
|Others                                                 |[…]                                        |
|Source: Reply to the RFI of 19 September 2014                                                      |

 206) As can be seen in table 31 above, the majority of sales of endoparasiticides for  sheep  in  the  Netherlands  are  generated  by  Elanco's
      Flukiver, NAH's Endex, Merck's Panacur, Bayer's Rintal and Zoetis' Cydectin Triclamox.

 207) In relation to switching, one  respondent  argues  that  where  alternative  brands  with  similar  indications,  product  characteristics,
      anthelmintic class groupings are available, customers may switch but often show allegiance, at least for a time, to the product  they  have
      traditionally used. Switching will be driven by the price differentials but also by the company reputation (and wider product range) of the
      other supplier. Dosing volume, route and withdrawal times will also impact on a decision.[115]

 208) The majority of respondents to the market investigation argue that switching is easy,  quick  and  economically  profitable.  However,  one
      respondent argues that switching can present technical difficulties, as in most cases the product to be switched will be part of an overall
      parasite control plan, implemented by a producer and any switching will have wider implications for the remainder of the control  plan,  at
      least for that production cycle. Finding alternative products with the exact critical profile (spectrum, duration,  withdrawal  period)  is
      not simple.[116]

 209) In relation to entry, Zoetis introduced Startect, as discussed above in paragraph (194).   The  respondents  to  the  market  investigation
      indicate that they expect entry by generic companies. The respondents to the market investigation consider that the generics companies  are
      important and place a competitive constraint to the branded products.[117]

 210) Finally, some products are indicated for a number of species, in particular sheep and cattle.  For example, only [5-10]% of  NAH's  Fasinex
      is sold for sheep, with the remaining [90-100]% sold for cattle.  Similarly, Bayer's Rintal, Zoetis' Cydectin Triclamox and Merck's Panacur
      are sold both to cattle and sheep. On this basis, the combined firm could not increase the prices of these products because it  would  lose
      sales from customers that use these products for cattle.

 211) All of these products are indicated for a number of worms, including liver flukes and (with  the  exception  of  Fasinex)  nematodes  (i.e.
      roundworms).  For example, only [20-30]% of and NAH's Endex is allocated in relation to the treatment of flukes, with  the  remaining  [80-
      90]% estimated for the treatment of other worms.  Similarly, [50-60]% of Zoetis' Cydectin Triclamox  is  allocated  for  the  treatment  of
      flukes, with the remaining [50-60]% estimated for the treatment of other worms.

3 Conclusion

 212) The Commission concludes that the proposed transaction does not raise serious doubts as to its compatibility with the  internal  market  on
      the endoparasiticides for sheep in n the Netherlands, based on the above, and particularly on (i) the lack of incentives of the Parties  to
      increase prices only in this segment, as the same products are used for several species, (ii) the fact that alternative competitors operate
      on thie market and (iii) the fact that new entry of generics is expected in the next years.

       CONCLUSION

 213) For the above reasons, the European Commission has decided not to oppose the notified operation and  to  declare  it  compatible  with  the
      internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

For the Commission

(signed)
Joaquín ALMUNIA
Vice-President

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.

[2]   Publication in the Official Journal of the European Union No C 299, 05.09.2014, p. 19.

[3]   Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262, 17 July 2009.

[4]   Commission Decision 2008/C80/EU in case COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80,  11  October  2007;  Commission  Decision
2003/C110/EU in case COMP/M.2922 - Pfizer/Pharmacia, OJ C110, 08 May 2003 and Commission  Decision  2000/C111/EU  in  case  COMP/M.1681  -   Akzo
Nobel/Hoechst, OJ C111, 14 January 2000.

[5]   Commission Decision 2008/C80/EU in case COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007, Case COMP/M.1681 –  Akzo
Nobel/Hoechst Roussel Vet, 22 November 1999, paragraph 13.

[6]   Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262,  17  July  2009;  Commission  Decision  2008/C80/EU  in  case
COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007.

[7]   In its decision in case COMP/M.4691- Schering Plough/Organon  Biosciences,  (Commission  Decision  of  11  October  2007),  the  Commission
mentioned that there is insufficient demand for economical mass-production of animal health products aimed at other  individual  species.   Where
demand for animal health products for such species is not met by local production (often  by  veterinarians  themselves  or  local  laboratories)
vaccines or pharmaceutical products developed for other species are often used (with dosage adapted to the mass of the animal).

[8]   Commission Decision in case COMP/M.4691- Schering Plough/Organon Biosciences, Commission Decision of 11 October 2007.

[9]   Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262,  17  July  2009;  Commission  Decision  2008/C80/EU  in  case
COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007.

[10]  Commission Decision 2008/C80/EU in case COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007.

[11]  Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262, 17 July 2009.

[12]        Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262, 17 July     2009.

[13]  Questionnaire Q1, Questionnaire to Competitors, questions 7 and 8.

[14]  Questionnaire Q2, Questionnaire to Customers, questions 10 and 11.

[15]  Questionnaire Q2, Questionnaire to Customers, questions 12 and 13.

[16]  Questionnaire Q2, Questionnaire to Customers, question 15 and Questionnaire Q1, Questionnaire to Competitors, question 18.

[17]  Agreed minutes of conference call with Boehringer Ingelheim of 31 July 2014.

[18]  Zoetis Memorandum of 10 August 2014.

[19]  Questionnaire Q2, Questionnaire to Customers, questions 16 and 17 and Questionnaire Q1, Questionnaire to Competitors, questions 19 and 20.

[20]  Commission Decision 2008/C80/EU in case COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007.

[21]  Questionnaire Q1, Questionnaire to Competitors, question 26.

[22]  Questionnaire Q1, Questionnaire to Competitors, question 27.2 and Questionnaire Q2, Questionnaire to Customers, question 24.2.

[23]  Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262,  17  July  2009;  Commission  Decision  2008/C80/EU  in  case
COMP/M.4691-  Schering   Plough/Organon  Biosciences,  OJ  C80,  11  October  2007;  Commission  Decision  2003/C110/EU  in  case  COMP/M.2922  -
Pfizer/Pharmacia, OJ C110, 08 May 2003; Commission Decision 2000/C111/EU in case COMP/M.1681 -  Akzo Nobel/Hoechst, OJ C111, 14 January 2000.

[24]  Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262, 17 July 2009, recital 339.

[25]  Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262,  17  July  2009;  Commission  Decision  2008/C80/EU  in  case
COMP/M.4691-  Schering   Plough/Organon  Biosciences,  OJ  C80,  11  October  2007;  Commission  Decision  2003/C110/EU  in  case  COMP/M.2922  -
Pfizer/Pharmacia, OJ C110, 08 May 2003; Commission Decision 2000/C111/EU in case COMP/M.1681 -  Akzo Nobel/Hoechst, OJ C111, 14 January 2000.

[26]  As the Parties do not overlap at the level of active ingredient, this segmentation shall not be further analysed.

[27]  Questionnaire Q1, Questionnaire to Competitors, question 30 and Questionnaire Q2, Questionnaire to Customers, question 27.

[28]  Questionnaire Q2, Questionnaire to Customers, question 32.

[29]  Questionnaire Q2, Questionnaire to Customers, question 31.

[30]  Questionnaire Q1, Questionnaire to Competitors, question 36.

[31]   A non-profit international association that collects sales data from reporting companies in 16 EEA Member States.

[32]  Questionnaire Q1, Questionnaire to Competitors, question 38.

[33]  Questionnaire Q1, Questionnaire to Competitors, question 38.

[34]  Questionnaire Q1, Questionnaire to Competitors, question 40.

[35]  Questionnaire Q1, Questionnaire to Competitors, question 41 and Questionnaire Q2, Questionnaire to Customers, question 39.

[36]  Questionnaire Q1, Questionnaire to Competitors, question 43.5.

[37]  Commission Decision 2011/C235/EU in in case COMP/M.6205 - Eli Lilly/Janssen Pharmaceutica  Animal  Health  Business  Assets,  OJ  C235,  09
August 2011, Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262, 17 July 2009; Commission Decision 2008/C80/EU in  case
COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007.

[38]  For example like the Danish Veterinary and Food Administration  which  has  issued  some  special  provisions  in  order  to  decrease  the
consumption of antibiotics in swine.

[39]  Zoetis Memorandum of 10 August 2014.

[40]  Questionnaire Q1, Questionnaire to Competitors, questions 44, 45, 46 and 47.

[41]  Questionnaire Q1, Questionnaire to Competitors, question 44.

[42]  Questionnaire Q1, Questionnaire to Competitors, question 45.

[43]  Commission Decision 2009/C262/EU in case COMP/M.5476 - Pfizer/Wyeth, OJ C262,  17  July  2009;  Commission  Decision  2008/C80/EU  in  case
COMP/M.4691-  Schering  Plough/Organon  Biosciences,  OJ  C80,  11  October  2007;  Commission  Decision  2003/C110/EU  in  case  COMP/M.2922   -
Pfizer/Pharmacia, OJ C110, 08 May 2003; Commission Decision 2000/C111/EU in case COMP/M.1681 -  Akzo Nobel/Hoechst, OJ C111, 14 January 2000.

[44]  For the purposes of this decision, the classification into Group 1, 2 and 3 has been carried out on the basis of  the  2013  market  shares
calculated and submitted by the Notifying Party.

[45]  Neither party has an endoparasiticide product that treats or prevents heartworm and intestinal worms in the EEA.  Elanco does  not  have  a
product that treats and prevents these two types of worms, apart from its recently launched endectocide Trifexis.  Elanco supplies  Guardian  for
heartworm and small quantities of Flubenol and Telmin for intestinal worms.   Similarly,  Novartis  does  not  supply  a  product  used  for  the
treatment/ prevention of heartworm and intestinal worms (apart from its endectocide Sentinel).  For intestinal worms, Novartis supplies  Milbemax
and Lopatol.

[46]  Form CO and Annex 16.

[47]  Questionnaire Q1, Questionnaire to Competitors, question 51.

[48]  Questionnaire Q1, Questionnaire to Competitors, question 54.

[49]  In 2013, Merck was awarded a patent by WIPO for an oral  veterinary  composition  against  ectoparasites  and  endoparasites  in  companion
animals.  On the basis of this patent, Merck is expected to launch an endectocide in 2015.  According to the 2013  patent,  the  endoparasiticide
component of Merck’s new product would be a macrocyclic lactone selected from the group of ivermectin, moxidectin or milbemycin.   As  such,  the
new product of Merck would compete closely with other heartworm products which contain these active ingredients, namely, Merial’s.

[50]  In 2013, Merial obtained a patent  in  the  United  States  for  an  oral  veterinary  composition  combating  both  ectoparasiticides  and
endoparasiticides in companion animals.  On the basis of this patent, Merial is expected to launch an endectocide in  Europe  in  2015  indicated
for dogs and cats. The endoparasiticide component of Merial’s new product could be ivermectin, moxidectin or milbemycin oxime.  The  patent  also
mentions that the new product could prevent heartworm and in one  of  the  invention’s  embodiments,  “the  soft  chewable  compositions  of  the
invention may provide an efficacy of up to 100% against Dirofilaria immitis (heartworm)”.

[51]  Minutes of conference call with Veneta Zootecnici &  Punto  Azzurro  Srl,  of  13.08.2014,  page  1;  Questionnaire  Q1,  Questionnaire  to
Competitors, question 48.

[52]  Questionnaire Q1, Questionnaire to Competitors, question 50.

[53]  Questionnaire Q1, Questionnaire to Competitors, question 198.

[54]  Questionnaire Q1, Questionnaire to Competitors, question 197.

[55]  Questionnaire Q2, Questionnaire to Customers, question 243.1 and question 244.1.

[56]  Questionnaire Q1, Questionnaire to Competitors, question 51.2. Questionnaire Q2,  Questionnaire  to  Customers,  question  60;  Minutes  of
conference call with Veneta Zootecnici, of 13.08.2014, page 2.

[57]  Questionnaire Q1, Questionnaire to Competitors, question 53. Questionnaire Q2, Questionnaire to Customers, question 59.

[58]  Minutes of conference call with Veneta Zootecnici, of 13.08.2014, page 2.

[59]  Questionnaire Q2, Questionnaire to Customers, questions 53 to 56.

[60]  Questionnaire Q1, Questionnaire to Competitors, question 59.

[61]  Questionnaire Q2, Questionnaire to Customers, question 61. Questionnaire Q1, Questionnaire to Competitors, question 57.1.

[62]  Questionnaire Q1, Questionnaire to Competitors, question 58.

[63]  Questionnaire Q1, Questionnaire to Competitors, question 57.

[64]  Questionnaire Q1, Questionnaire to Competitors, question 64.

[65]        The market share figures for 2013 are not reflective of NAH's position on this  market  given  that  in  2013  NAH's  otitis  externa
product was not available on the market […].

[66]  Questionnaire Q1, Questionnaire to Competitors, question 75. Minutes of conference call with Henry Schein Services Germany, of  06.08.2014,
page 1. Questionnaire Q1, Questionnaire to Competitors, question 89.

[67]  Questionnaire Q1, Questionnaire to Competitors, question 76. Questionnaire Q1, Questionnaire to Competitors, question 90.

[68]  Questionnaire Q1, Questionnaire to Competitors, question 197.

[69]  Questionnaire Q1, Questionnaire to Competitors, questions 198.3 and 198.4. Questionnaire Q1, Questionnaire to Competitors, questions  199.3
and 199.4.

[70]  Questionnaire Q1, Questionnaire to Competitors, questions 77 and 91.

[71]  Questionnaire Q1, Questionnaire to Competitors, questions 78 and 92.

[72]  Questionnaire Q1, Questionnaire to Competitors, questions 79 and 93.

[73]  Questionnaire Q1, Questionnaire to Competitors, questions 82 and 96.

[74]  Questionnaire Q1, Questionnaire to Competitors, questions 84 and 98.

[75]  Questionnaire Q1, Questionnaire to Competitors, questions 85 and 99.

[76]  Questionnaire Q1, Questionnaire to Competitors, question 103.

[77]  Questionnaire Q1, Questionnaire to Competitors, question 103.

[78]  Questionnaire Q2, Questionnaire to Customers, questions 126 to 130.

[79]  Questionnaire Q1, Questionnaire to Competitors, questions 105 and 133.

[80]  Questionnaire Q1, Questionnaire to Competitors, question 107. Questionnaire Q2, Questionnaire to Customers, question 128.

[81]  Questionnaire Q1, Questionnaire to Competitors, question 110.

[82]  Questionnaire Q1, Questionnaire to Customers, question 242.2.5.

[83]  Questionnaire Q1, Questionnaire to Competitors, question 112.

[84]  Questionnaire Q1, Questionnaire to Competitors, question 113. Questionnaire Q2, Questionnaire to Customers, question 139.

[85]  Questionnaire Q1, Questionnaire to Competitors, question 114. Questionnaire Q2, Questionnaire to Customers, question 140.

[86]  Questionnaire Q1, Questionnaire to Competitors, question 116.

[87]  Questionnaire Q1, Questionnaire to Competitors, question 116.

[88]  The Commission notes that in the segment for soluble only (oral) antimicrobials for swine, the transaction does not lead  to  any  Group  1
markets.

[89]  Questionnaire Q1, Questionnaire to Competitors, question 117.

[90]  Questionnaire Q1, Questionnaire to Competitors, question 121; Questionnaire Q2, Questionnaire to Customers, question 148.

[91]  Questionnaire Q1, Questionnaire to Competitors, question 197.

[92]  Questionnaire Q1, Questionnaire to Competitors, question 119.

[93]  Questionnaire Q1, Questionnaire to Competitors, question 120; Questionnaire Q2, Questionnaire to Customers, question 146.

[94]  Dysentery is an inflammation of the large intestine called by the Brachyspira hyodysenteriae bacteria, while mixed  infections  are  caused
by Brachyspira philosocoli, in combination with Brachyspira hyodisenteriae and / or Lawsonia intracellularis.

[95]  See EMA CVMP Reflection paper on the use of pleuromutilins in food-producing animals in the European Union: development of  resistance  and
impact     on     human     and     animal     health,     EMA/CVMP/AWP/119489/2012-Rev.1,     13      February      2014,      available      at
http://www.ema.europa.eu/docs/en_GB/document_library/Scientific_guideline/2014/02/WC500161930.pdf.

[96]  See press release of the Committee for Medicinal Products for Veterinary Use (CVMP) Meeting of 06-08 May 2014 available at:

      http://www.ema.europa.eu/docs/en_GB/document_library/Press_release/2014/ 05/WC500166227.pdf.

[97]  Ileitis is caused by the Lawsonia intracelluraris bacteria, and is a disease of the intestinal lining.

[98]  Ileitis is very common in pig herds. Between 88% and 100% of farms (and 34% to 67% of pigs) at some point get infected with the disease.

[99]  See EMA CVMP Reflection paper on the use of pleuromutilins in food-producing animals in the European Union: development of  resistance  and
impact     on     human     and     animal      health,      EMA/CVMP/119489/2012-Rev.1,      13      February      2014,      available      at:
http://www.ema.europa.eu/docs/en_GB/document_library/Scientific_ guideline/2014/02/WC500161930.pdf.

99     The  goal  was   to   achieve   a   10   %   reduction   on   2009   consumption   levels   as   measured   in   kg   by   2013.   Source:
http://www.foedevarestyrelsen.dk/english/SiteCollectionDocuments/25_PDF_word_filer%20til%20download/Yellow%20Card%20Initiative.pdf

[100]       Questionnaire Q1, Questionnaire to Competitors, question 135.

[101]       Questionnaire Q1, Questionnaire to Competitors, question 197.2.6.

[102]       Questionnaire Q1, Questionnaire to Competitors, question 148 and 151.

[103]       Commission Decision 2008/C80/EU in case COMP/M.4691- Schering Plough/Organon Biosciences, OJ C80, 11 October 2007.

[104]       Questionnaire Q1, Questionnaire to Competitors, question 148.

[105]       Questionnaire Q1, Questionnaire to Competitors, question 149.

[106]       Questionnaire Q1, Questionnaire to Competitors, question 150.

[107]       Questionnaire Q1, Questionnaire to Competitors, question 154.

[108]       Questionnaire Q1, Questionnaire to Competitors, question 157.

[109]       Questionnaire Q1, Questionnaire to Competitors, question 164.

[110]       Questionnaire Q1, Questionnaire to Competitors, question 161.

[111]       Questionnaire Q1, Questionnaire to Competitors, question 164.

[112]       Questionnaire Q1, Questionnaire to Competitors, question 164.

[113]       Questionnaire Q1, Questionnaire to Competitors, question 169.

[114]       Questionnaire Q1, Questionnaire to Competitors, question 161.

[115]       Questionnaire Q1, Questionnaire to Competitors, questions 189 and 189.1.

[116]       Questionnaire Q1, Questionnaire to Competitors, questions 180 to 181.

-----------------------
 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE