UNITED STATES OF AMERICA In the Matter of Docket No. COMPLAINT The Federal Trade Commission ("Commission"), having reason to believe that Respondent Zeneca Group PLC ("Zeneca"), a corporation subject to the jurisdiction of the Commission, has proposed to merge with Astra AB ("Astra"), a corporation subject to the jurisdiction of the Commission, in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint, stating its charges as follows: I. DEFINITIONS 1. "Long-Acting Local Anesthetics" means pharmaceutical products used to relieve pain during the course of surgical or other medical procedures by blocking pain impulses from reaching the central nervous system. Long-Acting Local Anesthetics have an effective duration of up to six to seven hours, and allow patients to remain awake and conscious throughout the medical procedure. 2. "Zeneca/Chiroscience License Agreement" means the "Patent and Know-How Licence relating to Levobupivacaine and Trademark Assignment relating to Chirocaine," dated March 30, 1998, between Chiroscience Group plc and Darwin Discovery Limited and Zeneca Limited; the "Share Subscription Agreement," dated March 30, 1998, between Chiroscience Group plc and Zeneca Limited; and the "Supply Agreement," dated March 30, 1998, between Chiroscience R&D Limited and Zeneca Limited. 3. "Chiroscience" means Chiroscience Group plc, Darwin Discovery Limited and Chiroscience R&D Limited. II. RESPONDENT 4. Respondent Zeneca is a corporation organized, existing and doing business under and by virtue of the laws of England, with its office and principal place of business located at 15 Stanhope Gate, London W1Y 6LN, England. 5. Respondent Zeneca, through the Zeneca/Chiroscience License Agreement, is engaged in the research and development of Long-Acting Local Anesthetics. 6. Respondent is, and at all times relevant herein has been, engaged in commerce as "commerce" is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C. § 12, and is a corporation whose business is in or affects commerce as "commerce" is defined in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44. II. THE ACQUIRED COMPANY 7. Astra is a corporation organized, existing and doing business under and by virtue of the laws of Sweden, with its office and principal place of business located at S-151 85 Södertälje, Sweden. 8. Astra is engaged in, among other things, the research, development, manufacture and sale of Long-Acting Local Anesthetics. 9. Astra is, and at all times relevant herein has been, engaged in commerce as "commerce" is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C. § 12, and is a corporation whose business is in or affects commerce as "commerce" is defined in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44. III. THE MERGER 10. On or about December 9, 1998, Zeneca and Astra entered into a Merger Agreement and Plan of Merger, whereby Zeneca agreed to acquire 100 percent of all issued shares of Astra stock for approximately $30.5 billion ("Merger"). Upon completion of the Merger, Zeneca will be renamed AstraZeneca. IV. THE RELEVANT MARKET 11. For purposes of this Complaint, the relevant line of commerce in which to analyze the effects of the Merger is the manufacture and sale of Long-Acting Local Anesthetics. 12. For purposes of this Complaint, the United States is the relevant geographic area in which to analyze the effects of the Merger in the relevant line of commerce. V. STRUCTURE OF THE MARKET 13. The market for the manufacture and sale of Long-Acting Local Anesthetics is highly concentrated as measured by the Herfindahl-Hirschman Index ("HHI"). The pre-merger HHI is 6,682 points. Astra is the leading supplier of Long-Acting Local Anesthetics in the United States and worldwide, and is one of only two companies with Food and Drug Administration ("FDA") approval for the manufacture and sale of Long-Acting Local Anesthetics in the United States. Abbott Laboratories is the only other company with FDA approval for the manufacture and sale of Long-Acting Local Anesthetics in the United States. 14. Zeneca does not currently compete in the relevant market for the manufacture and sale of Long-Acting Local Anesthetics. However, through the Zeneca/Chiroscience License Agreement, Zeneca is engaged in the research and development of a new Long-Acting Local Anesthetic, which it plans to begin marketing and selling in the United States in 1999. 15. Astra is an actual competitor in the relevant market for the manufacture and sale of Long-Acting Local Anesthetics. Zeneca, through the Zeneca/Chiroscience License Agreement, is an actual potential competitor in the relevant market for the manufacture and sale of Long-Acting Local Anesthetics. VI. BARRIERS TO ENTRY 16. Entry into the relevant market, other than the expected introduction of a new Long-Acting Local Anesthetic product by Zeneca and Chiroscience, would not be timely, likely, or sufficient to deter or counteract the adverse competitive effects described in Paragraph 17 because of, among other things, the difficulty of researching and developing a new product, obtaining FDA approval and gaining customer acceptance. VII. EFFECTS OF THE MERGER 17. The effects of the Merger, if consummated, may be substantially to lessen competition and to tend to create a monopoly in the relevant market in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, in the following ways, among others:
VIII. VIOLATIONS CHARGED 18. The Merger agreement described in Paragraph 10 constitutes a violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. 19. The Merger described in Paragraph 10, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this day of , 1999, issues its Complaint against said respondent. By the Commission. Donald S. Clark SEAL: |