Merger
On 7 October 2024, the Austrian Federal Competition Authority (AFCA) was again notified of the intended indirect acquisition of all shares in and sole control of Bormioli Pharma S.p.A., Italy (“Bormioli”), by Gerresheimer AG, Germany (“Gerresheimer”), implemented as a merger.
Involved companies
Gerresheimer manufactures pharmaceutical primary packaging made of glass and plastic. Bormioli also produces glass and plastic packaging for the pharmaceutical industry. In addition, both companies also offer products for the cosmetics, food and drinks industry.
AFCA’s competition concerns
The AFCA examined the merger and identified competition concerns related to the increasing concentration of pharmaceutical primary packaging made of soda lime: a horizontal merger of two competing companies can have a negative impact on prices, products and quality for customers where market entry barriers exist.
AFCA’s investigations showed that the involved companies would have a significant joint market share in the market for pharmaceutical primary packaging made of soda-lime glass, that the market is characterised by high market entry barriers, and that it is highly concentrated.
Market surveys conducted
The AFCA conducted extensive market surveys as part of its investigations in order to be able to better assess the market conditions. It requested information from both customers and competitors in the market for primary packaging made of soda-lime glass for the pharmaceutical as well as for the cosmetics, food and drinks industries. The surveys revealed that the market for pharmaceutical primary packaging made of soda-lime glass is characterised by high market entry barriers. For example, manufacturers of soda-lime glass packaging for the food and drinks industry can neither easily nor quickly change over their production to soda-lime glass packaging for the pharmaceutical industry.
Commitments dispel competition concerns
To address the competition concerns, the parties offered commitments to the AFCA and the Federal Cartel Prosecutor, thereby undertaking to introduce remedies aimed at establishing a competitor (remedy taker) in the area of pharmaceutical primary packaging made of soda-lime glass. The proposed remedy package, lasting for the duration of three years (to be extended optionally to a maximum of five years), consists of the following remedies:
- Transfer of some of Bormioli’s customers to the remedy taker
- Bormioli to offer subcontracting to the remedy taker
- Bormioli to support remedy taker in developing its own production
- Payment of a qualification bonus to customers switching over to the remedy taker
- Monitoring of compliance with the commitments through an independent trustee.
This package of measures should enable a successful entry into the market.
The commitments can be downloaded here (in German):
Commitments Z-6738 Gerresheimer/Bormioli