The Commission has cleared under the EU Merger Regulation the proposed acquisition of Organon BS of The Netherlands, a subsidiary of Akzo Nobel active worldwide in human and animal health, by the global pharmaceutical company Schering-Plough Corporation of the US, subject to conditions. The Commission found that the proposed transaction as initially notified would have given rise to competition concerns in twelve product areas and more than thirty relevant national markets. To address the Commission's concerns, SP offered to divest the overlapping activities in all the markets raising serious doubts. In light of these commitments, the Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Schering-Plough is a global healthcare company. Organon BS is the holding company for the human and animal healthcare activities of Akzo Nobel. It consists of two operating units: Organon International BV, the human pharmaceutical business; and Intervet International BV, the animal health business.

The Commission's investigation revealed that the proposed transaction would not significantly modify the structure of the human health markets concerned and that a number of credible alternative competitors would continue to exercise a competitive constraint on the merged entity.

As regards veterinary products, the Commission found that the proposed transaction, as initially notified, could raise competition concerns in a number of national markets in five vaccine areas - swine E.Coli, equine influenza and tetanus, ruminant neonatal diarrhoea, ruminant clostridia, multi-species rabies - and seven pharmaceutical areas, namely endocrines for reproductive use, insulin, antibiotics/sulphonamides, antibiotics/intra-mammary mastitis treatment, euthanasia, parasiticides and anti-inflammatories. In all the markets where the Commission identified competition concerns the transaction would lead to very high combined market shares or even a monopoly situation. In a number of instances the investigation also revealed that the products offered by the parties were the closest substitutes for each other.

To resolve these competitive concerns, Schering-Plough proposed to divest more than twenty formulations and trademarks covering the whole of the EEA. The divestitures consist of the sale of the relevant assets for the manufacture and sale of the products concerned. These assets include goods and inventory, marketing authorisations, trademarks, intellectual property rights and know-how. Following the market testing, the Commission concluded that the businesses would be viable and that their divestiture would resolve all identified competition concerns. [11 October 07]