AstraZeneca’s CAT acquisition to be probed by OFT

The Office of Fair Trading (OFT) has announced it is to investigate AstraZeneca’s acquisition of Cambridge Antibody Technologies (CAT). Earlier this week, AstraZeneca bought the British monoclonal antibody research centre valued at 702 million pounds, but the OFT has said it will investigate the acquisition to ensure that no competition and merger rules have been broken by the deal.

In a statement to the London Stock Exchange, the OFT explained that if the transaction is finalised, certain aspects of the deal may fall into the jurisdiction of the Enterprise Act 2002, which holds the power to sanction companies for attempting to destroy competition in the market place.

The statement read: “Should it be found to be a relevant merger situation, the OFT will further consider whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services that warrants reference to the Competition Commission for investigation and report.”

Under the provisions of the act, the OFT has 30 days to make a decision once handing out a merger notice, after which the Competition Commission will have 24 weeks to investigate whether or not the merger has had “an adverse effect on competition”. If found proven, it has the power to demand “remedies” from the companies involved.

AstraZeneca, which also stands to inherit the royalties for Abbott Laboratories’ Humira drug as part of the deal, said the acquisition was a “major long-term strategic investment.”

David Brennan, AstraZeneca’s chief executive officer, remarked: “We will now build on this success by combining CAT?s research and development capability in novel biological therapeutics with our own expertise in discovery, global product development and sales and marketing.”

“Together we will create, for the long term, an opportunity to introduce more medicines that will deliver real benefit to patients worldwide,” he concluded.

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