Abbott Laboratories’ acquisition of the pharmaceutical unit of Solvay has taken a major step forward after regulators in Europe gave the thumbs-up to the deal.
The European Commission has approved the deal, although the decision is conditional upon the divestment of the cystic fibrosis testing business of Solvay’s subsidiary Innogenetics in Europe. The Commission added that it had concerns that the companies’ “high combined market shares in CF testing could have harmed competition on the markets” and “customers would have to face higher prices and less choice”.
However the European regulator went on to say that in light of the commitments made by Abbott to divest the CF testing business, it concluded that “the transaction would not significantly impede effective competition”. The Commission also investigated the potential effects of the transaction on in vitro diagnostics markets but decided that is no problem “due to generally small increments and the presence of a sufficient number of other credible competitors”.
The probe also found that “competition concerns could be excluded in the pharmaceutical markets, due to the limited horizontal overlaps between the parties’ activities and the lack of high market shares”. Abbott said it would buy the Solvay unit for 5.2 billion euros in September, noting that the deal would provide it with “a significant presence in key global emerging markets” as well as add more than $3 billion to turnover.
