THE Australian Competition and Consumer commission says the proposed acquisition of Neogen Genomics by Zoetis Holdings would combine the two largest suppliers of genomic testing services for cattle in Australia, and the merger will be subjected to an in-depth phase 2 assessment.

In a media release issued on Friday, the ACCC said Zoetis Holdings LLC’s (Zoetis) proposed acquisition of Neogen Corporation’s global animal genomic testing business (Neogen Genomics) could substantially lessen competition.

Zoetis and Neogen Genomics both supply genomic testing services for beef cattle, dairy cattle and sheep in Australia. Beef Central flagged the proposed takeover in this earlier article.

“We consider the acquisition could substantially lessen competition in the supply of genomic testing services for cattle in Australia,” ACCC Commissioner Dr Philip Williams said.

“The acquisition would combine the two largest suppliers of genomic testing services for cattle in Australia. The information before the ACCC indicates that there are limited competitive alternatives, none of which would operate at a similar scale to the merged entity, and that barriers to entry and expansion are significant.”

The ACCC is also considering the competitive significance of Zoetis obtaining access to an increased volume and breadth of genetic data on cattle and sheep in Australia through the acquisition.

“We will conduct further in-depth inquiries and seek more information about the likely competitive effects of this proposed merger as part of the Phase 2 assessment,” Dr Williams said.

The ACCC said it had not reached a conclusion on the issues and will continue to consider the acquisition in Phase 2.

The ACCC has invited submissions in response to its Phase 2 Notice by 31 July. Parties can contact the ACCC via mergers@accc.gov.au.

More information and the Phase 2 Notice are available on the ACCC’s Acquisition Register: Zoetis – Neogen Genomics Business.

Merger control regime

The ACCC can decide a notification is to be subject to a Phase 2 review if the ACCC is satisfied that the acquisition to which the notification relates, if put into effect, could, in all of the circumstances, have the effect, or be likely to have the effect, of substantially lessening competition in any market.

Under the Competition and Consumer Act, a Phase 2 assessment can take up to 90 business days, unless extended under specific circumstances.

More guidance on the new merger regime can be found on the ACCC’s website: Guidance documents for the merger control regime.

Source: ACCC