The Commerce Commission has granted clearance for Zoetis Inc. (Zoetis) to acquire Betrola Pty Limited, which owns the Jurox group of companies (Jurox). Zoetis and Jurox both supply animal health care products.
Deputy Chair Sue Begg said that the Commission is satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.
“Our investigation found that for most products for which Zoetis and Jurox overlap, they compete with other manufacturers and distributors. We consider this competition will mean that the merged entity is unlikely to be able to significantly increase price or reduce quality,” says Ms Begg.
The areas that raised potential competition concerns in New Zealand related to anaesthetic products used on companion animals, namely opioid-based sedatives (used to calm animals prior to a procedure) and antidotes (used to counteract sedatives).
For opioid-based sedatives, the parties compete via Torbugesic (Zoetis) and via Butordyne and Buprelieve (Jurox).
“In our Statement of Unresolved Issues (SoUI) we had concerns that existing suppliers of opioid-based sedatives would not sufficiently constrain the merged entity. However, evidence received subsequent to the SoUI satisfied us that these existing suppliers would impose a significant constraint on the merged entity,” said Ms Begg.
For antidotes, the parties competed via Antisedan (Zoetis) and Antipam (Jurox). The Commission raised concerns that the proposed acquisition would remove the existing competition between Zoetis and Jurox and, with only one other competitor, existing competition would not be sufficient to replace the loss of competition. To address the Commission’s concerns, Zoetis has surrendered the rights to distribute Antisedan in New Zealand. Antisedan is now no longer supplied by Zoetis, but instead by a distributor called SVS Veterinary Supplies Limited.
A public version of the written reason for the decision will be available on the Commission’s in the near future.
Background
Zoetis is a global animal healthcare company that develops, manufactures and distributes healthcare treatments for companion animals (such as cats and dogs) and production animals (such as sheep and cattle).
Zoetis is also seeking approval for the transaction in Australia from the Australia Competition & Consumer Commission (ACCC). ACCC also has concerns with the transaction, although these concerns are different to the areas that raised the most concerns in New Zealand. Zoetis has offered divestments to address the ACCC’s concerns and the ACCC is expecting to decide on the transaction in September.
Jurox is an Australia-based animal healthcare company that also develops, manufactures and distributes healthcare treatments for companion and production animals. Jurox’s business includes a New Zealand subsidiary, Jurox New Zealand Limited.
We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
