Antitrust Law Daily FTC requires Boehringer to divest animal health products for acquisition approval
Thursday, December 29, 2016

FTC requires Boehringer to divest animal health products for acquisition approval

By Greg Hammond, J.D.

Pharmaceutical company Boehringer Ingelheim has agreed to divest five types of animal health products in the United States to settle FTC allegations that Boehringer’s proposed $13.53 billion acquisition of Sanofi’s animal care subsidiary—Merial—would likely be anticompetitive, the FTC has announced (In the Matter of C.H. Boehringer Sohn AG & Co. KG, FTC File No. 161 0077).

Boehringer proposed to acquire Sanofi’s Merial animal health business (valued at $13.53 billion) in exchange for Boehringer’s Consumer Health Care business unit (valued at $7.98 billion) and $5.54 billion in cash compensation. Without divestitures, however, the proposed asset swap would harm competition in the U.S. markets for various vaccines for companion animals and certain parasite control products for cattle and sheep, the FTC’s complaint asserts.

To neutralize the proposed transaction’s likely anticompetitive effects, the proposed FTC consent order requires Boehringer to divest the companion animal vaccines to Eli Lilly and the company’s Elanco Animal health division—including canine, feline, and rabies vaccines—and Boehringer’s parasite control products to Bayer AG, including products to prevent and control outbreaks of parasites in cattle and sheep. Boehringer is also required to provide technical assistance and other transition services to ensure that Elanco and Bayer are able to independently manufacture and sell the divested products.

Attorneys: Michael R. Barnett, for FTC. William A. Henry (Baker Botts LLP) for C.H. Boehringer Sohn AG & Co. KG.

Companies: C.H. Boehringer Sohn AG & Co. KG

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