European Commission - Press release
Mergers: Commission approves the acquisition of Cephalon by Teva, subject to conditions
Brussels, 14 October 2011 - The European Commission has cleared under the EU Merger Regulation the proposed acquisition of US-based pharmaceutical company Cephalon by the generic pharmaceutical company Teva of Israel. The decision is conditional upon the divestment of Cephalon's generic version of its "Provigil" drug. Provigil is indicated for the treatment of excessive daytime sleepiness associated with narcolepsy. Teva has also developed a generic version of the drug. In light of the commitments, the Commission concluded that the transaction does not raise competition concerns.
The Commission examined the effects of the proposed transaction on the market for drugs based on Modafinil, the main active pharmaceutical ingredient of Provigil and the generic version developed by Teva as well as the one Cephalon has in the pipeline. The Commission was concerned that the proposed transaction, as initially notified, would have significantly reduced generic competition in the markets where Modafinil is sold.
The Commission's investigation showed that the divestment of Cephalon's generic pipeline Modafinil product, as offered by the company, will allow a competitor to emerge and compete effectively with the merged entity.
The investigation did not reveal any other significant modification to the competitive situation and dynamics of other relevant markets, as a number of credible and significant competitors will d continue to exercise a competitive constraint on the merged entity.
The Commission therefore concluded that the proposed transaction, as modified by the commitment, would not significantly impede effective competition in the European Economic Area (EEA)1 or a substantial part of it.
Teva is the world’s largest generic pharmaceutical company. Cephalon is a primarily originator company, but also supplies generic pharmaceuticals in the EEA.
The transaction was notified to the Commission on 25 August 2011.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at:
The EU plus Iceland, Liechtenstein and Norway.