Pfizer-Aspen deal should be approved by Brazil’s antitrust agency, federal court rules
1 Aug 2019. By Rodrigo Russo.
The deal between drugmakers Pfizer and Aspen Pharmacare should be approved by the Brazilian antitrust agency, according to a federal court ruling seen by MLex. The deadline suspension the agency declared for the case until its governing body resumes activities should also be voided, the judge said.
Yesterday, federal judge Edna Márcia Silva Medeiros Ramos agreed to Pfizer and Aspen’s requests. Ramos wrote a new quorum for the Tribunal depends on future appointments and Senate scrutiny, procedures that take time and impose losses on the parties.
Aspen is buying Pfizer’s bisurated magnesium assets — a type of antacid — in Brazil. The deal is related to the divestment required by the Administrative Council for Economic Defense, or CADE, to clear GlaxoSmithKline and Pfizer’s joint venture in the consumer health sector. CADE asked the companies to sell the assets to eliminate competition concerns, and was aware of the potential buyer when it approved the transaction on June 11.
On June 12, Pfizer and Aspen filed the deal for CADE’s review under the fast-track procedure because it didn’t raise competition concerns. On July 9, CADE’s investigatory unit published its decision approving the deal without conditions. A few days later, the Tribunal lost its ability to form a quorum after councilor Paulo Burnier da Silveira departed. Since mid-July, the Tribunal has only had three members. It requires at least four to hold a decision-making session.
After getting a green light from the investigatory unit, companies must still wait 15 days after the decision is published to close transactions, as third parties or Tribunal members can intervene. This process is known as ‘avocation’ when it involves councilors.
For Pfizer and Aspen, that due date would have been July 24. But on July 17, CADE said it had suspended all deadlines, and the waiting period to close the deal would be eight days counted from when the agency resumes normal operations.
When Pfizer and Aspen failed to get CADE to reconsider its decision, they filed the lawsuit challenging the suspended deadlines.
Ramos said it was CADE that conditioned approval of the GSK-Pfizer joint venture on Pfizer’s divestment to Aspen. She said it’s not reasonable to wait for the quorum to be restored, especially since the deal was fast-tracked.
The court ruling could prove useful for other companies who have had mergers approved by the investigative unit, but cannot close those deals because the agency lacks a quorum. CADE can appeal Ramos' decision.