CCI gives nod to Mylan-Abbott merger

New Delhi: Generic drug maker Mylan Inc. and US-based Abbott Industries have received the Competition Commission of India's (CCI) nod to proceed with their merger.

The fair trade regulator has cleared the application made by New Moon BV, a new company incorporated under the laws of the Netherlands, for the purpose of this merger. New Moon BV had approached the CCI on 12 August.

Abbott's established pharmaceutical products (EPP) segment will merge with Mylan's existing business, which will then vest with New Moon.

Abbott's EPP segment includes specialty pharmaceutical products and branded generics. Abbott will have a 21% shareholding in New Moon. New Moon's wholly-owned subsidiary, Moon of PA Inc., has been newly incorporated to help with the merger. This wholly-owned subsidiary will be subsumed under Mylan. Thereafter, the common stock of Mylan will be cancelled. New Moon will issue its stock to Mylan's former shareholders to become the parent company of Mylan.

"Former shareholders of Mylan will own approximately 78% and Abbott and its affiliates will own approximately 22% of shareholding in the Acquirer (New Moon)," the CCI order states.

The order noted that New Moon has claimed that Abbott's acquisition of 22% in it is only in the nature of an investment. But the CCI said there were still "competition concerns" that would need to be analysed on a case-by-case basis.

However, the CCI also further notes that the market share of the two companies in India will not rise significantly-6-10% is their combined market share.

Emails sent to Abbott and Mylan remained unanswered.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.