Dechra Granted Clearance To Acquire Osurnia From Elanco

27 May 2020, 16:44 by Commerce Commission

The Commerce Commission has granted clearance to Dechra Pharmaceuticals PLC, Dechra Limited and Dechra Veterinary Products LLC to acquire the assets, rights and liabilities relating to Osurnia from Elanco Tiergesundheit AG.

Osurnia is a treatment for otitis, which is an inflammation of the external ear canal and it is a common affliction in dogs.

In reaching its decision, the Commission considered the potential impact of the proposed acquisition on competition in the market for the wholesale supply of products for the treatment of otitis in dogs.

Deputy Chair Sue Begg said the Commission is satisfied that the acquisition is unlikely to substantially lessen competition in this market.

“We consider that the presence of competing suppliers with the ability to expand is likely to constrain Dechra in its ability to raise prices or reduce the quality of its otitis treatment products,” Ms Begg said.

“Post-acquisition, there would be a number of suppliers, including Elanco, that would continue to supply otitis treatment products comparable to those offered by Dechra. In addition, a new otitis treatment called Neptra is likely to be introduced into New Zealand shortly and this product would also compete closely with Dechra’s otitis treatment products.”

A public version of the written reasons will be available on the Commission’s case register in the near future.

Background

This decision relates to a clearance application from Dechra that was registered on 26 March 2020.

While Dechra and Elanco each supply a number of products in New Zealand, they only overlap in the supply of products used in the treatment of otitis in dogs.

The Commission is currently considering an application from Elanco, which is seeking clearance to acquire Bayer AG’s animal health business which includes a treatment for otitis in dogs. The future supplier of Neptra in New Zealand would likely be either Bayer or Elanco depending on the outcome of the Commission’s assessment of Elanco’s application.

We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

Further information explaining how the Commission assesses a merger application is available on our website.