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Brussels, 14th May 2009

Mergers: Commission approves proposed creation of joint venture between Lonza and Teva

The European Commission has cleared under the EU Merger Regulation the proposed creation of a joint venture to be active in the biosimilar industry, between the two pharmaceutical companies Lonza of Switzerland and Teva of Israel. Biosimilars are the generic equivalent of drugs produced using biological processes. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Lonza is active in the pharmaceutical, healthcare and life science industries with various activities from research to final product manufacture, whilst Teva is a global pharmaceutical company that develops, produces and markets generic and innovative pharmaceutical products. The joint venture would be active firstly in the development and then in the production and marketing of the generic equivalents of a selected portfolio of biologic pharmaceuticals (biosimilars). Biosimilars are drugs that are to biopharmaceuticals (drugs produced using biological processes) what generic medicines are to synthetic pharmaceuticals, that is copies or similar products to innovator pharmaceuticals.

The Commission found that the proposed transaction would give rise to no overlaps between the activities of the parent companies and that no competition problems were likely to arise from overlaps between the JV and Teva in the finished dose pharmaceutical products market, as Teva has reduced market shares in the markets where the JV will be active and a number of competitors are present in those markets.

The Commission's investigation also ruled out any competition concerns due to vertical relationships between Lonza's contract manufacturing activities and the joint venture's future downstream products. Whilst Lonza is a relatively important player in the contract manufacturing market, the Commission concluded that there was no likelihood of anticompetitive closing off of supplies to other companies wishing to compete in the finished dose pharmaceutical markets, given that a range of alternative suppliers are available.

More information on the case will be available at:

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