CCCS Approves iNova Pharmaceuticals' Acquisition of Mundipharma's Consumer Healthcare Business

07 Dec, 2023

CCCS Approves iNova Pharmaceuticals' Acquisition of Mundipharma's Consumer Healthcare Business

The Competition and Consumer Commission of Singapore (CCCS) recently granted approval for iNova Pharmaceuticals' acquisition of Mundipharma’s consumer healthcare business. This decision came after an extensive and detailed evaluation, conducted from September 29 to October 16, 2023, during which CCCS sought input from a wide range of stakeholders, competitors, and customers associated with both iNova and Mundipharma.

The primary focus of this evaluation was to ensure compliance with Section 54 of the Competition Act 2004, which aims to prevent mergers that could substantially reduce competition within Singapore's markets. After an in-depth analysis, CCCS determined that the proposed transaction would not breach these regulations.

Several critical factors contributed to this decision. Firstly, the market for throat preparation products, a key aspect of this acquisition, boasts multiple competitive suppliers. Additionally, customers have demonstrated a high level of flexibility in switching between suppliers, considering these products as closely interchangeable.

Furthermore, certain intermediate customers, such as chain pharmacies and supermarkets, possess a degree of buyer power that could effectively limit the influence of the merged entity. While pricing transparency may vary for these intermediate customers due to diverse procurement processes and contract lengths, the retail prices and therapeutic indications for throat preparation products remain easily comparable. This fosters a competitive landscape without providing any undue advantage to the merged entity.

Moreover, the evaluation highlighted that the merged entity lacks the capability to monopolize the market by bundling products. Customers' preferences tend towards stocking a diverse range of products from various brands and suppliers, mitigating any potential foreclosure strategies by the merged entity.

In conclusion, CCCS's rigorous assessment affirmed that the proposed acquisition does not pose a substantial risk of diminishing market competition within the relevant sectors in Singapore. This decision reflects the commission's commitment to ensuring fair and competitive market practices while facilitating business growth and development within the region.