CCI Approves Proposed Merger Of Strides Arcolab Limited And Shasun Pharmaceuticals Limited.

27 May, 2015

 

On March 4, 2015, CCI approved the proposed transaction involving the merger of Strides Arcolab Limited (‘Strides’) and Shasun Pharmaceuticals Limited (‘Shasun’). The notice was filed pursuant to the approval of the scheme of amalgamation by the boards of directors of Strides and Shasun.

 

CCI observed that Strides is a public limited company engaged in the development of generic pharmaceutical products in various therapeutic segments, in India and across the globe. Shasun is a public limited company engaged in developing, manufacturing, and selling active pharmaceutical ingredients (‘APIs’) and formulations, and is also engaged in contract manufacturing and research both within and outside India.

 

CCI observed that Strides is primarily active in formulations while Shasun is active in the API business. CCI further observed that because APIs are primary inputs for the manufacture of formulations, there was a potential vertical relationship between Shasun and Strides. However, CCI noted that only three of the APIs manufactured by Shasun have potential usage by Strides.

 

CCI determined that there were a number of suppliers and customers (downstream formulation manufacturers) for such APIs in India and the merged entity would not have the ability or incentive to foreclose access to these APIs.

 

CCI also observed that there may be potential horizontal overlaps between Strides and Nutra Specialities Private Limited (‘Nutra’), a company engaged in the manufacture of APIs, because Shasun held equity shares in Nutra. However, CCI noted that there were other suppliers in respect of the APIs in India.

 

Accordingly, CCI held that the proposed acquisition was not likely to have any AAEC in India and approved the transaction under Section 31(1) of the Competition Act.