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Mergers: Commission approves proposed acquisition of Cardinal Health by Alliance Boots

European Commission - IP/06/1246   22/09/2006

Other available languages: FR DE

IP/06/1246

Brussels, 22nd September 2006

Mergers: Commission approves proposed acquisition of Cardinal Health by Alliance Boots

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of sole control of Cardinal Health UK by Alliance Boots plc of the UK. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Alliance Boots is a public company and a leading UK health and beauty retailer active in full-line and short-line wholesaling, retailing and, to a limited extent, manufacturing pharmaceutical products. A full-line pharmaceutical wholesaler offers a full range of pharmaceutical product lines, including products that are not typically kept in stock by pharmacies and therefore require frequent deliveries. Short-line is a limited range of pharmaceuticals, typically fast moving product lines that sell in large quantities. Cardinal Health UK is active in short-line wholesaling of pharmaceuticals in the UK. Through the proposed transaction Alliance Boots would acquire Cardinal Health's UK pharmaceutical wholesaling business via OTC Direct, a wholly owned subsidiary of Alliance Boots active in the UK in short-line pharmaceutical wholesaling.

Alliance Boots is one of the main players on the UK market. The target Cardinal Health UK is a rather minor player in the UK market for the wholesale of pharmaceuticals and the increment in market share is quite low. Other major competitors, such as AAH and Phoenix, which are both part of major international pharmaceutical groups, are active on the pharmaceutical wholesale market. Regional wholesalers also have a strong presence in most regions.

The Commission┬┤s examination of the proposed transaction showed that the horizontal overlaps between the activities of Alliance Boots and Cardinal Health are limited to short-line wholesaling, where the combined market share nationally is relatively low and below a level indicating market power. Alliance Boots is a minor player in short-lining and provides only a small increment to the market share of Cardinal Health.

More information on the case will be available at:

http://ec.europa.eu/competition/mergers/cases/index/m83.html#m_4301


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