Eli Lilly and Company
Case brief
What is this about?
The Competition Commission of India imposed a penalty of INR 1 crore on Eli Lilly for failing to timely notify its acquisition of Novartis Animal Health. The Commission rejected the De Minimis Exemption claim and found the transaction violated Section 6 of the Competition Act by closing before Commission approval.
What did the court decide?
Imposition of a penalty of INR 1,00,00,000 on Eli Lilly.
What the court decided
Fair Competition For Greater Good
COMPETITION COMMISSION OF INDIA
(Combination Registration No.C-2015/07/289)
14.07.2016
Order under Section 43A of the Competition Act, 2002 (“Act”) in relation to combination registration no. C-2015/07/289
Introduction
- The Competition Commission of India (“ Commission ”), in its meeting held on 30.03.2015, observed that Eli Lilly and Company (“ Eli Lilly ” / “ Acquirer ”) entered into a Stock and Asset Purchase Agreement (“ SAPA ”) with Novartis AG (“ Novartis ”) on 22.04.2014 to acquire the global veterinary pharmaceuticals business of the latter i.e. Novartis Animal Health ( “NAH” ). However, the said acquisition was not notified to the Commission as required under sub-section (2) of Section 6 of the Act. Accordingly, a communication dated 08.04.2015 was issued to Eli Lilly under sub-section (1) of Section 20 of the Act, seeking information relating to the aforesaid acquisition. The response of Eli Lilly was received on 07.05.2015.
- On 09.07.2015, the Commission received a notice in Form II given by Eli Lilly in relation to the said acquisition of NAH from Novartis. As per the information given in the Notice, the global acquisition of NAH by Eli Lilly was consummated on 01.01.2015. In relation to India, Novartis India Limited (“ Novartis India ” a subsidiary of Novartis) and Elanco India Private Limited (“ Elanco India ”, a wholly owned subsidiary of Eli Lilly) entered into a Slump Sale Agreement (“ SSA ”) on 03.12.2014, for the transfer of assets of Novartis India, relating to NAH business, to Elanco India (“ India Leg ”).
Issues for consideration
3 issues framed by the court
Whether the acquisition of Novartis Animal Health by Eli Lilly falls under the De Minimis Exemption given the definition of 'enterprise'.
Whether the failure to notify the combination to the Commission within the stipulated time constitutes a violation attracting penalty under Section 43A.
Whether the quantum of penalty for contravention of filing requirements should be reduced based on bona fide error.
Parties & counsel
- applicant
Eli Lilly and Company
Case details
As recorded by the court registry
All orders in this case
2 orders share this CNR
- Order 1
- Order 2 — this page
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