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

The commission is studying whether the deal will infringe section 54 of the Competition Act 2004.

The Competition and Consumer Commission of Singapore (CCCS) has invited the public to provide feedback on iNova Pharmaceuticals Limited's acquisition of Mundipharma’s consumer healthcare business.

The commission is studying whether the acquisition would 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.

iNova cited five reasons as to why its proposed transaction will not infringe section 54 of the Competition Act 2004:

1. The merged entity will continue to face significant competitive constraints from larger global pharmaceutical companies that have a comprehensive range of existing CCFT products, and existing and potential competitors that can easily expand or enter the relevant market;

2. There are no material barriers to entry or expansion, in particular, intellectual property rights and regulatory requirements, for the relevant market; 

3. There are no significant switching costs for intermediate and end customers across the various sales channels such as supermarkets and retail pharmacies. Further, there is substantial countervailing buyer power as large and sophisticated intermediate customers are generally able to multi-source and can also switch to other suppliers of CCFT products with minimal cost; 

4. Coordination between market players is unlikely as there are numerous existing and potential competitors, and the ease of switching by both intermediate and end customers creates strong commercial incentives for suppliers of CCFT products to continue to price competitively, and there are low barriers to entry which means high potential for increased competition; and 

5. iNova and Mundipharma’s consumer healthcare business do not supply or procure any products or services from each other. The proposed transaction also does not add significantly to the product range that iNova and its target business each already offer to retail customers before the proposed transaction. Additionally, the merged entity will not be able to foreclose competitors by requiring customers to purchase brands or products in a bundle, given the general preference of retail customers to stock a range of products across various brands and suppliers.

The public can provide feedback on the proposed acquisition until 16 October, 5 p.m.