Te Whanganui-a-Tara – The Commerce Commission has granted clearance for Zoetis to acquire Betrola, which owns the Jurox group of companies. Zoetis and Jurox both supply animal health care products.
The commission is satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.
Their investigation found for most products for which Zoetis and Jurox overlap, they compete with other manufacturers and distributors.
The competition will mean that the merged entity is unlikely to be able to significantly increase price or reduce quality.
The areas that raised potential competition concerns in New Zealand related to anaesthetic products used on companion animals, mostly opioid-based sedatives used to calm animals prior to a procedure and antidotes used to counteract sedatives.
The commission has initial concerns that existing suppliers of opioid-based sedatives would not sufficiently constrain the merged entity. However, evidence received subsequently satisfied them that the existing suppliers would impose a significant constraint on the merged entity.
For antidotes, the parties competed via Antisedan (Zoetis) and Antipam (Jurox). The commission raised concerns the proposed acquisition would remove the existing competition between Zoetis and Jurox.
With only one other competitor, existing competition would not be sufficient to replace the loss of competition. To address the commission’s concerns, Zoetis has surrendered the rights to distribute Antisedan in New Zealand.
Antisedan is now no longer supplied by Zoetis, but instead by a distributor Veterinary Supplies.
Zoetis is a global animal healthcare company that develops, manufactures and distributes healthcare treatments for companion animals such as cats and dogs and production animals such as sheep and cattle.
Zoetis is also seeking approval for the transaction in Australia from the Australia Competition & Consumer Commission (ACCC).
ACCC has concerns with the transaction, although these concerns are different to the areas that raised the most concerns in New Zealand.
Zoetis has offered divestments to address the ACCC’s concerns and the ACCC is expecting to decide on the transaction in September.
Jurox is an Australia-based animal healthcare company that also develops, manufactures and distributes healthcare treatments for companion and production animals. Jurox’s business includes a New Zealand subsidiary, Jurox New Zealand.
The commission says it will give clearance to a proposed merger if it is satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.