THE Australian Competition and Consumer Commission (ACCC) has given the green light to the proposed merger of Arrow and Apotex (PD 10 May 2018), finding that the transaction "will not substantially lessen competition in any market".
Both companies import and distribute generic and OTC pharmaceuticals, and combined will supply around half the market for generic prescription drugs to pharmacies in Australia.
"Any deal that combines two of the four largest competitors in a market will require close scrutiny," said ACCC chair Rod Sims.
"However we found that a combined Arrow-Apotex would continue to face strong competition from Mylan and Sandoz, and to a lesser extent from short-range suppliers like Generic Health and Pharmacor," Sims said.
He also noted that the ability for pharmacies to pick and choose suppliers for individual generics also acts as a competitive constraint, with a number of smaller generic players active in the market in supplying pharmacies.
"There is the potential for further competition via these smaller players building up a larger portfolio of generic products."
The merged business does not yet have a name, but chairman Dennis Bastas said he expects the deal will settle before the end of the year.
"The merger will provide our Australian customers with unparalleled service and support from the businesses with which they have chosen to partner for over 15 years," he promised.
Bastas (pictured) said once complete, the combined operation would continue to provide all of the Arrow and Apotex brands currently on offer, "and further enhance our customer service and continuity of supply to better help pharmacists grow their business".
The transaction remains subject to the conclusion of definitive agreements and the satisfaction of certain other conditions, including approval from the Foreign Investment Review Board.
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