Issue 074 | Nestle/Pfizer Merger

The Competition Tribunal recently gave its approval to the SA leg of Nestle's acquisition of Pfizer's infant nutrition business.   Nestle bought this business not to increase its market share in South Africa (which was already 70%), but to increase its share in the all-important Chinese market. The ruling is interesting because the Tribunal accepted an arrangement that went as follows:

• Nestle would immediately sell the physical assets it acquired from Pfizer in SA to a third party, and simultaneously grant that third party a 10-year, royalty-free licence to use the former Pfizer trade marks, together with the technology.  
• During this 10-year period, the third party would need to introduce its own trade marks and start a re-branding process.