CCCS clears iNova Pharmaceuticals’ acquisition of Mundipharma’s consumer healthcare business

The proposed transaction will not infringe Section 54 of the Competition Act of 2004.

The Competition and Consumer Commission of Singapore has given iNova Pharmaceuticals the greenlight to acquire Mundipharma’s consumer healthcare business following public consultation of the proposed acquisition.

From 29 September 2023 to 16 October 2023, CCCS sought feedback from various stakeholders, competitors, and customers of iNova and Mundipharma.

CCCS concluded that the proposed transaction will not infringe Section 54 of the Competition Act 2004, which prohibits mergers that have resulted or may result in a substantial lessening of competition within any market in Singapore. 

CCCS found that the proposed transaction is unlikely to lead to a substantial lessening of competition (SLC) in the relevant market for the following reasons: 

1. There are multiple suppliers of throat preparation products that compete closely with the merged entity; 
2. Customers can switch easily between suppliers as they view throat preparation products supplied by competing suppliers to be close substitutes; 
3. There is some indication that selected intermediate customers, such as chain pharmacies and supermarkets, may have some degree of countervailing buyer power that could constrain the merged entity; 
4. The prices charged to intermediate customers are not transparent due to differing procurement and negotiation processes, and varying contract lengths. Furthermore, the therapeutic indication and retail prices of throat preparation products displayed on the shelves of retailers are transparent and easily comparable, and there is no additional information made available to competing suppliers from the Proposed Transaction that would make it easier for competitors to collude; and 

The merged entity will not have the ability to foreclose competitors by requiring customers to purchase products in a bundle, given that selected intermediate customers may have some degree of countervailing buyer power and customers’ general preference is to stock a range of products across various brands and suppliers. 

ALSO READ: CCCS seeks feedback on iNova Pharmaceuticals’ acquisition of Mundipharma’s consumer healthcare business