CELEX: 32020M9962
Language: en
Date: 2020-10-15 00:00:00
Title: Commission Decision of 15/10/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9962 - MYLAN / ASPEN’S EU THROMBOSIS BUSINESS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 15.10.2020
                                                                C(2020) 7163 final
                                                                                 PUBLIC VERSION
                                                                 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                                                                 information omitted has been replaced by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.
                                                                To the notifying party
Subject:            Case M.9962 – MYLAN / ASPEN’S EU THROMBOSIS BUSINESS
                    Commission decision pursuant to Article 6(1)(b) of Council Regulation
                    No 139/20041 and Article 57 of the Agreement on the European Economic
                    Area2
Dear Sir or Madam,
(1)       On 17 September 2020, the European Commission received notification of a
          concentration pursuant to Article 4 of the Merger Regulation which would result
          from a proposed transaction by which Mylan N.V. (“Mylan”, Netherlands), through
          its subsidiary Mylan Ireland Limited (Ireland) intends to acquire sole control within
          the meaning of Article 3(1)(b) of the Merger Regulation of the whole of Aspen’s EU
          Thrombosis Business (“Aspen’s Target Business”, Mauritius), a subset of Aspen
          Global Incorporated (“AGI”, Mauritius), owned and indirectly controlled by Aspen
          Pharmacare Holdings Limited (“Aspen”, Mauritius) by way of purchase of assets
          (‘the Transaction’)3. Mylan is designated hereinafter as the “Notifying Party” and
          together with Aspen’s Target Business, as the “Parties” to the Transaction. The
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    OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).
3    Publication in the Official Journal of the European Union No C 317, 25.9.2020, p. 24.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak---          undertaking that would result from the Transaction is referred to as the ‘merged
         entity’.
1.       THE PARTIES
(2)      Mylan is a global pharmaceutical company that develops, licenses, manufactures,
         markets and distributes generic, branded generic and specialty pharmaceuticals
         through a vertically integrated global supply chain that includes over 40
         manufacturing facilities. Its portfolio includes more than 1 500 products.
(3)      Aspen’s Target Business consists of certain intellectual property, assets and rights
         relating to the unincorporated business of manufacture, distribution and marketing of
         four AGI antithrombotic products in the EEA, namely Nadroparin (brand names
         Fraxiparine and Fraxodi), Fondaparinux (brand name Arixtra), Certoparin (brand
         name Mono Embolex) and Danaparoid (brand name Orgaran). These assets
         constitute a business with market presence to which a turnover can be clearly
         attributed.4
2.       THE OPERATION AND THE CONCENTRATION
(4)      Pursuant to an asset purchase agreement dated 7 September 2020, between Mylan
         Ireland Limited and AGI, Mylan agreed to acquire sole control of all assets of
         Aspen’s Target Business and each right attached to these5.
(5)      As a result of this Transaction, Mylan will obtain sole control over Aspen’s Target
         Business within the meaning of Article 3(1)(b) of the Merger Regulation.
3.       UNION DIMENSION
(6)      The Parties have a combined aggregate worldwide turnover of more than EUR 5 000
         million6 (Mylan EUR 10 156 million, Aspen’s Target Business EUR […] million).
         Each of them has a Union-wide turnover in excess of EUR 250 million (Mylan EUR
         […] million, Aspen’s Target Business EUR […] million), but they do not achieve
         more than two-thirds of their aggregate Union-wide turnover within one and the
         same Member State. The notified operation therefore has a Union dimension
         pursuant to Article 1(2) of the Merger Regulation.
4   See Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the
    control of concentrations between undertakings, OJ C95 of 16.04.2008, in particular p. 24
5   Including the (i) de-commercialized products (See Form CO footnotes 2 and 4), (ii) Pending Registration
    Products (See Form CO footnote 5) and (ii) Orgaran New Business Opportunity products (See Form CO,
    footnote 6), which may be transferred to Mylan at a later date. All of these products have been included in
    the substantive assessment of the concentration by the Notifying Party.
6   Turnover calculated in accordance with Article 5 of the Merger Regulation.
                                                          2
 ---pagebreak--- 4.       MARKET DEFINITIONS
    4.1. Fixed Dose Pharmaceuticals
(7)      Mylan and Aspen’s Target Business produce and sell Fixed Dose Pharmaceuticals
         (“FDPs”). FDPs are pharmaceutical products that have undergone all stages of
         production, including packaging in the final container and labelling. Production and
         sale of FDPs is one of the most common activity of pharmaceutical companies.
(8)      As regards the product market, the Commission found in a past decision,7 that
         antithrombotic FDPs falling into ATC4 classes B1B1 (heparin) and B1B2
         (antithrombin III), along with those falling into ATC3 class B1X (other
         antithrombotic agents) that have the same applications as heparins, belong to the
         same product market as they have the same mode of action (injectable) and range of
         indications. In a subsequent case,8 the Commission did not specify whether the
         market should be defined as if each of the above ATC4 classes constitute a different
         market, or if ATC3 class B1B (of which classes B1B1 and B1B2 are part) also
         constitutes a market in itself.
(9)      The Notifying Party provides market shares for all of those possible product market
         definitions, including plausible affected markets at molecule level, namely a subset
         of generic products at ATC4 level that are based on the same molecule.
(10)     In any event, for the purposes of this Decision, it is not necessary to conclude on the
         exact product market definition for antithrombotic FDPs, that is (i) whether classes
         B1B1 and B1B2 are each a separate product market or if together they constitute a
         product market (under class B1B), and (ii) whether class B1X is a separate market or
         it should be considered together with class B1B, as the Transaction does not give
         rise to serious doubts as to its compatibility with the internal market or the
         functioning of the EEA agreement under any of those plausible market definitions.
(11)     As regards the geographic market, in line with numerous Commission precedents9,
         the relevant market for antithrombotic FDPs is national.
    4.2. Contract manufacturing organisation (“CMO”)
(12)     CMO is an arrangement under which a manufacturer provides upstream
         manufacturing services of FDPs under contract on behalf of third party
         pharmaceutical companies.
(13)     As regards the product market definition, a number of contract manufacturing
         markets may be defined, corresponding in each case to the pharmaceutical form of
         the specific product that is manufactured. In some cases, contract-manufacturing
         markets can be further subdivided by the conditions in which the manufacturing
7    Case M. 3354- Sanofi-Synthelabo/Aventis (2004).
8    Case M.5253- Sanofi-Aventis/Zentiva (2009).
9    Case M.5295- Teva/Barr (2008), Case M.5479- Teva/Lonza (2009), Case M.5530- Glaxo Smith
     Kline/Stiefel Laboratories (2009), Case M.6162- Pfizer/Ferrosan Consumer Healthcare Business (2011).
                                                          3
 ---pagebreak---         process takes place (types of active pharmaceutical ingredient (“API”) involved in
        the process, toxicity, sterile environment, etc.).10
(14)    In past decisions,11 the Commission left open whether the CMO market should be
        defined as an overall market, or whether it could be further segmented into four
        product markets, namely contract manufacturing of: (i) solid dose and powder
        pharmaceuticals; (ii) liquids and semi-solid pharmaceuticals; (iii) sterile liquid
        pharmaceuticals; and (iv) medicated confectionary pharmaceuticals.
(15)    For the purpose of the assessment of the Transaction, the relevant segment of the
        upstream CMO product market is the one of sterile liquid pharmaceuticals, as
        Aspen’s Target Business produces downstream injectable FDPs. In any event, for
        the purpose of this Decision, the precise product market definition of CMO can be
        left open as, regardless of the market definition considered (an overall market for
        CMO, or a market for CMO services for sterile liquid pharmaceuticals), the
        Transaction does not give rise to serious doubts as to its compatibility with the
        internal market and the functioning of the EEA Agreement.
(16)    With regard to the geographic market, in line with past decisions of the
        Commission12, the precise market definition for CMO services can be considered to
        be worldwide, or at least EEA-wide. No further elaboration is necessary, since the
        transaction does not give rise to serious doubts under either of the above possible
        geographic market definitions.
5.      COMPETITIVE ASSESSMENT
   5.1. Analytical Framework
(17)    Under Articles 2(2) and 2(3) of the Merger Regulation, the Commission must assess
        whether a proposed concentration would significantly impede effective competition
        in the internal market or in a substantial part of it, in particular through the creation
        or strengthening of a dominant position.
(18)    Frequently, a merger can entail horizontal effects. In this respect, in addition to the
        creation or strengthening of a dominant position, the Commission Guidelines on the
        assessment of horizontal mergers under the Merger Regulation (“the Horizontal
        Merger Guidelines”)13 distinguish between two main ways in which mergers
        between actual or potential competitors on the same relevant market may
        significantly impede effective competition, namely (a) by eliminating important
        competitive constraints on one or more firms, which consequently would have
        increased market power, without resorting to coordinated behaviour (non-
        coordinated effects); and (b) by changing the nature of competition in such a way
        that firms that previously were not coordinating their behaviour are now
        significantly more likely to coordinate and raise prices or otherwise harm effective
10  Case M.6613- Watson/Actavis (2012)
11  Case M.5953- Reckitt Benckister/SSL (2010), paragraphs 59 and 62, and Case M.7480- Actavis/Allergan
    (2015).
12  Cases M.5953- Reckitt Benckiser/SSL (2010) and Case M.6613- Watson/Actavis (2012).
13  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of
    concentrations between undertakings, OJ C 31, 5.2.2004 p.5
                                                        4
 ---pagebreak---         competition. A merger may also make coordination easier, more stable or more
        effective for firms which were coordinating prior to the merger (coordinated effects).
(19)    Furthermore, a merger can entail vertical effects. The Commission Guidelines on the
        assessment of non-horizontal mergers under the Merger Regulation (“the non-
        horizontal Merger Guidelines”)14 also distinguish between two main ways in which
        non-horizontal mergers may significantly impede effective competition: (a) when
        they give rise to input and/or customer foreclosure (non-coordinated effects); and (b)
        when the merger changes the nature of competition in such a way that firms that
        previously were not coordinating their behaviour, are now more likely to coordinate
        to raise prices or otherwise harm effective competition (coordinated effects). The
        non-horizontal Merger Guidelines distinguish two types of foreclosure: (a) where the
        merger is likely to raise the costs of downstream rivals by restricting their access to
        an important input (input foreclosure) and (b) where the merger is likely to foreclose
        upstream rivals by restricting their access to a sufficient customer base (customer
        foreclosure).
   5.2. Competitive assessment
5.2.1. Horizontal Overlap in the market for antithrombotic FDPs.
(20)    According to the Notifying Party’s submission, the Parties’ activities horizontally
        overlap in the FDP market for antithrombotic products only in France. The
        combined market shares of the Parties post-Transaction would be [10-20]% at most
        under every possible market definition,15 with very low increment, [0-5]% at most.
(21)    In view of the low combined market shares and very limited overlap, the
        Commission concludes that the Transaction does not raise serious doubts as to its
        compatibility with the internal market or the functioning of the EEA agreement, as
        regards this horizontal overlap in the market for antithrombotic FDPs.
5.2.2. Vertical Relationship between Contract Manufacturing Organisation (upstream) and
        the sale and production of FDPs (downstream)
(22)    In the present case, Mylan’s upstream participation in CMO for FDPs in markets
        where the Target is present downstream with market shares exceeding 30% in
        several national markets, gives rise to vertically affected markets.16
(23)    The Notifying Party agrees to the market definitions drawn from the Commission’s
        precedence and provides Mylan’s total market share and its market share per
        segment in the worldwide and EEA-wide market. Mylan’s upstream market shares in
        the CMO market are [0-5]% at most (see table 1).
14  Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
    concentrations between undertakings, OJ C256, 18.1.2008, p.6.
15 For completeness, the Parties consider alternative market definitions for FDPs for antithrombotic
    products, based on both the third (ATC3) and the fourth (ATC4) levels of classification. The Parties also
    provide overall market shares of ATC3 classes B1B and B1X together. In addition to the above, the
    Parties also consider plausible affected markets at molecule level namely a subset of generic products at
    ATC4 level that are based on the same molecule.
16 For completeness, the target does not include any CMO contracts or infrastructure.
                                                         5
 ---pagebreak---  ---pagebreak---         Table 2 Market shares of Aspen’s Target Business’ downstream (only if above 30%,
                                 “-” means no presence or below 30%)
                                     B1B (B1B1 +    B1B2       B1X      B1B +
                                         B1B2)                           B1X
                      Austria              -          -      [50-60]%     -
                      Bulgaria         [70-80]%  [80-90]%   [90-100]% [70-80]%
                      Belgium              -          -     [90-100]%     -
                      Croatia              -          -     [90-100]%     -
                      Chechia          [40-50]%  [50-60]%   [90-100]% [40-50]%
                      Estonia              -          -     [90-100]%     -
                      Finland              -          -     [90-100]%     -
                      France               -          -     [90-100]%     -
                      Germany              -          -     [90-100]%     -
                      Greece               -          -     [90-100]%     -
                      Italy                -          -     [90-100]%     -
                      Latvia           [40-50]%  [40-50]%   [90-100]% [40-50]%
                      Lithuania        [70-80]%  [70-80]%   [90-100]% [70-80]%
                      Netherlands      [40-50]%  [40-50]%   [90-100]% [40-50]%
                      Norway               -          -     [90-100]%     -
                      Poland               -          -      [70-80]%     -
                      Portugal             -          -     [90-100]%     -
                      Romania          [40-50]%  [40-50]%   [90-100]% [50-60]%
                      Slovakia         [60-70]%  [70-80]%   [90-100]% [60-70]%
                      Slovenia         [40-50]%  [40-50]%   [90-100]% [40-50]%
                      Spain                -          -     [90-100]%     -
                      UK                   -          -     [90-100]%     -
(26)   Notwithstanding the high market shares in national markets downstream, customer
       foreclosure can be excluded, for the following reasons:
(27)   Firstly, Aspen’s Target Business’ CMO needs for antithrombotic FDPs pre-
       Transaction are covered in-house by Aspen.17 Therefore, even if post-Transaction
       the merged entity were to source all of its CMO needs for antithrombotic FDPs
       internally, there would be no change to the pre-Transaction situation and no rival
       CMO supplier would be affected.
(28)   Secondly, Aspen’s Target Business’ high market shares in some countries for some
       injectable FDPs would in any event not give the merged entity sufficient market
       power to harm rival upstream CMO providers. This is because CMO providers offer
       the same services for all sterile liquid pharmaceuticals, and do not differentiate if
       their downstream customers manufacture specific injectable FDPs such as
       antithrombotic injectables. The potential opportunity for the CMO services linked to
       Aspen’s Target Business needs for antithrombotic FDPs is only a fraction of around
       [0-5]% of the market for CMO services for sterile liquid pharmaceuticals in the
       EEA.18
17 See Form CO, paragraph 88 and footnote 74.
18 See Form CO, paragraph 87.
                                                  7
 ---pagebreak--- (29)   Consequently, this limited potential demand for CMO services for sterile liquid
       pharmaceuticals would in any event not allow the merged entity to foreclose
       Mylan’s rival CMO providers upstream, from accessing downstream markets for
       injectable FDPs by withholding or reducing Aspen’s Target Business purchases
       (which are only limited to antithrombotic injectable FDPs).
(30)   Thirdly, according to information provided by the Notifying Party, CMO services do
       not represent a substantial part of the total final costs of injectable antithrombotic
       FDPs (below [0-5]% on average).19
(31)   Finally, the Notifying Party submits that in past Decisions20 the Commission has
       used as a reference to assess the foreclosure risk, the combined downstream market
       share of the merged entity and any of its downstream competitors for which the
       merged entity potentially provides CMO services in order to evaluate the potential
       harm of similar vertical relationships.
(32)   On this basis, the only country in which Mylan provides CMO services to any of
       Aspen’s Target Business’ downstream competitors is the U.K. More specifically,
       Mylan provides CMO services for the molecule heparin (B1B1) to [company name],
       through a production site in [country].21 The combined market share of the Target
       and [company name] under any possible market definition is below [5-10]%.22
       Consequently, the aggregated market shares of the two competitors do not raise
       competitive concerns as a result of customer foreclosure.
(33)   Therefore, the merged entity cannot foreclose its upstream competitors in the
       provision of CMO services by denying access to the downstream market for
       antithrombotic FDPs.
(34)   In light of the above, the Commission concludes that the Transaction does not raise
       serious doubts as to its compatibility with the internal market or the functioning of
       the EEA Agreement with regard to the vertical link between the upstream CMO
       market the downstream market for FDP antithrombotic products.
19 See e-mail of 25/09/2020.
20 For instance, see: Case M.5253- Sanofi-Aventis/Zentiva (2009), Case M.5661- Abbott/Solvay
   Pharmaceuticals (2010), Case M.6278- Takeda/Nycomed (2011) and Case M.6613- Watson/Actavis
   (2012).
21 Additionally, the Notifying Party submits that [information concerning Mylan’s CMO activities]. See
   Form CO, footnote 61.
22 See Form CO, paragraph 80.
                                                       8
 ---pagebreak--- 6.   CONCLUSION
(35) 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 and Article 57 of the EEA Agreement.
                                                   For the Commission
                                                   (Signed)
                                                   Margrethe VESTAGER
                                                   Executive Vice-President
                                              9