Competition approves its first ban on a business merger

BarcelonaFor the first time, the National Commission on Markets and Competition (CNMC) has decided to prohibit a merger of companies since its creation in 2013. This is the case involving Curium Pharma Holding Spain, SLU (Curium), owned by Luxembourg-based funds, which planned to take control of the Institute of Radiopharmacy.

The public body believes that the transaction "implies an obstacle to effective competition in the markets for PET radiopharmaceuticals used in cancer detection tests and in the markets for the provision of contract manufacturing services (CMO) for PET radiopharmaceuticals."

Curium is an operator with significant production capacity. It owns two cyclotrons (particle accelerators) and commercially operates five others, all public, spread throughout Spain. IRAB, for its part, owns a single cyclotron in Barcelona.

Precedents at the TDC

The CNMC, chaired by Cani Fernández, received notification of the acquisition on October 17 of last year. During its first-phase analysis, it detected risks to competition and initiated a second phase, which now concludes with the ban. This body usually sets conditions for merger transactions, as in the case of the one planned between BBVA and Banc Sabadell, But until now, it had not vetoed any transaction. The precedents come from the former Competition Tribunal (TDC), prior to the CNMC, which vetoed, for example, the Gas Natural and Endesa deal in 2006 and the Telefónica and Iberbanda deal that same year.

After its analysis, the CNMC concludes that "the acquisition threatens competition in the markets for the supply of PSMA radiopharmaceuticals (used to detect prostate cancer) and in the provision of contract manufacturing services to third parties (CMO) in northeast Spain." The commitments presented by Curium, it warns, "are neither sufficient nor effective to resolve the problems detected, nor are there viable conditions to solve them." Furthermore, any conditions that the CNMC could impose to approve the transaction "would not be effective either."

In any case, the ban is not definitive. The Minister of Economy, Trade, and Enterprise will be notified, who will decide whether to refer the matter to the Council of Ministers. If it deems it appropriate, the Minister may assess the transaction based on criteria of general interest other than competition. This is the criterion used by the Spanish government. to prohibit the merger for at least three years between BBVA and Sabadell, once the transaction was approved by the CNMC.

Despite exceeding its powers, the Catalan Competition Authority (Acco) prepared a mandatory, non-binding report in the second phase of the procedure. This analysis indicated that "there were significant risks that the merger could reduce effective competition in the market for the manufacture and marketing of PET radiopharmaceuticals for the diagnosis of PSMA prostate cancer in Catalonia."