South African Competition Tribunal Approves Infant Formula Transaction

On the 19th December 2013 the South African Competition Tribunal (“the Tribunal”) unconditionally approved the acquisition of the South African infant nutrition business of Pfizer Nutrition (“Pfizer”) by Aspen Nutritionals, a division of Pharmacare Ltd (“Aspen”).  The transaction follows the earlier acquisition of Pfizer’s global infant nutrition business by Nestlé, to which the effective divestment of Pfizer’s South African infant nutrition business was a condition to the Tribunal’s approval, granted in February 2013.Aspen, Nestlé and Pfizer were the three major suppliers of non-specialty infant formula products in South Africa, and accordingly the transaction would have resulted in a reduction in the number of major independent players from three to two in this segment of the broader South African infant formula market.  Following a week-long Tribunal hearing, during which RBB economist Richard Murgatroyd provided oral expert testimony on the prospects for the transaction to give rise to unilateral effects through a weakening of actual or potential competition, as well as the potential for coordinated effects, the Tribunal determined that the transaction was unlikely to harm competition in the supply of infant formula products in South Africa.RBB Economics advised the merging parties throughout the process, working alongside Aspen’s legal advisors Fasken Martineau, Nestlé’s legal advisors ENSafrica and Pfizer’s’ legal advisors Bowman Gilfillan.