This decision follows the unconditional clearance by the European Commission of all other EEA countries and referral back to the ADLC for France.

The deal involved overlaps in the wholesale and retail distribution of pharmaceutical goods in several European countries. The ADLC considered both local markets and a national market taking into account the buyer power of the Pharmaceutical Purchasing Groups which mainly operate at national level. CRA played a pivotal role in showing the role of PPGs and the increasing competitive constraints from players evolving outside the defined market, convincing the ADLC to accept the proposed behavioural remedies.

A CRA team including Laurent Flochel, Romain Bizet, and Sylvestre Boittin Duchesne advised both Parties for the European Commission and the ADLC proceedings.

Q&A with Laurent Flochel

Vice President at Charles River Associates

Tell us more about your involvement in the acquisition.

We have assisted both Parties since the beginning of the project. We have worked extensively to gather the relevant data for each Party and carried out all competitive analysis in the prenotification and then during the notification phase. We have also helped the legal teams with the design of potential remedies.

During the prenotification phase, we assisted the Parties to answer to the numerous questionnaires issued by the European Commission, which has been a very heavy task. The Commission cleared the case in Italy and referred back to the French Competition Authority (ADLC) for the analysis of the French market. We then assisted the Parties in this new phase.

What were some of the challenges you were faced with?

In this market, the competitive interactions between the wholesalers and their clients take place at two levels: at a national or multiregional level with the pharma purchasing groups and at a local level with the pharmacies. The Commission and the ADLC carried out their competitive analysis both at the level of the catchment area of each depot and at the multiregional or national level.

How did you resolve them?

We managed to convince the ADLC that the competitive pressure exerted by the purchasing groups is very important and that the competitive analysis should not be limited to the local level (i.e. at the level of the catchment areas). In this market very precise and granular data are available. It allowed us to calculate very accurate market shares in value at different levels.

What have been some of the key trends you’ve seen in the M&A space this year?

The last two years have been very intense in the M&A activity and there is a clear trend for the various competition authorities to a stricter merger control on both sides of the Atlantic. The CMA in the UK is today probably the toughest agency.