UNITED STATES OF AMERICA
In the Matter of
Docket No. C-3880
ZENECA GROUP PLC, a corporation,
DECISION AND ORDER
The Federal Trade Commission having initiated an investigation of the proposed merger of Zeneca Group PLC ("Zeneca") and Astra AB ("Astra"), and Zeneca, hereinafter sometimes referred to as "Respondent," having been furnished thereafter with a copy of a draft of Complaint that the Bureau of Competition presented to the Commission for its consideration and which, if issued by the Commission, would charge Respondent with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
Respondent, its attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent Order, an admission by Respondent of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a statement that the signing of said Agreement is for settlement purposes only and does not constitute an admission by Respondent that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission's Rules; and
The Commission having thereafter considered the matter and having determined that it had reason to believe that the Respondent has violated the said Acts, and that a Complaint should issue stating its charges in that respect, and having thereupon accepted the executed Agreement Containing Consent Order and placed such Agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure described in § 2.34 of its Rules, the Commission hereby issues its Complaint, makes the following jurisdictional findings and enters the following Order:
1. Respondent Zeneca is a corporation organized, existing, and doing business under and by virtue of the laws of England, with its office and principal place of business located at 15 Stanhope Gate, London W1Y 6LN, England.
2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondent, and the proceeding is in the public interest.
IT IS ORDERED that, as used in this Order, the following definitions shall apply:
A. "Zeneca" means Zeneca Group PLC, its directors, officers, employees, agents, representatives, successors (including but not limited to AstraZeneca) and assigns; its subsidiaries, divisions, groups and affiliates controlled by Zeneca Group PLC (including but not limited to Zeneca Limited) and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. Following the Merger, Zeneca includes Astra AB, its directors, officers, employees, agents, representatives, successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by Astra AB, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.
B. "Astra" means Astra AB, a corporation organized, existing and doing business under and by virtue of the laws of Sweden, with its office and principal place of business located at S151 85 Södertälje, Sweden.
C. "Respondent" means Zeneca.
D. "Commission" means the Federal Trade Commission.
E. "Chiroscience" means Chiroscience Group plc, a corporation organized, existing and doing business under and by virtue of the laws of England with its office and principal place of business located at 283 Cambridge Science Park, Milton Road, Cambridge CB4 4WE, England; Darwin Discovery Limited, a corporation organized, existing and doing business under and by virtue of the laws of England with its office and principal place of business located at 283 Cambridge Science Park, Milton Road, Cambridge CB4 4WE, England; and Chiroscience R&D Limited, a corporation organized, existing and doing business under and by virtue of the laws of England with its office and principal place of business located at 283 Cambridge Science Park, Milton Road, Cambridge CB4 4WE, England.
F. "Chirocaine License" means the "Patent and Know-How Licence Relating to Levobupivacaine and Trade Mark Assignment Relating to 'Chirocaine,'" dated March 30, 1998, between Chiroscience Group plc and Darwin Discovery Limited and Zeneca Limited.
G. "Chiroscience/Zeneca Agreement" means the "Surrender and Termination of Patent and Know-How Licence Relating to Levobupivacaine and Trade Mark Assignment Relating to 'Chirocaine,'" dated March 12, 1999, between Chiroscience Group plc, Darwin Discovery Limited, Zeneca Group PLC, and Zeneca Limited; the Agreement Amending Share Subscription Agreement; and the "Agreement Terminating Supply Agreement of 30 March 1998," dated March 12, 1999, between Chiroscience R&D Limited and Zeneca Limited.
H. "Agreement Amending Share Subscription Agreement" means the "Agreement Amending Share Subscription Agreement of 30 March 1998," dated March 12, 1999 between Chiroscience Group plc and Zeneca Limited.
I. "Chiroscience/Zeneca Agreement End Date" means the "End Date" as defined in clause 11.3 of the Chiroscience/Zeneca Agreement.
J. "FDA" means the United States Food and Drug Administration.
K. "Chirocaine" means the chemical compound (S)-1-butyl-(N)-(2,6-dimethylphenyl)-2-piperidinecarboxamide known as levobupivacaine and having CAS registration number 27262-47-1 in all its forms including base and hydrochloride salt.
L. "Chirocaine Product" means Chirocaine and any "Licensed Products" as defined in the Chiroscience/Zeneca Agreement.
M. "Chirocaine Improvements" means any "Improvement" as defined in the Chiroscience/Zeneca Agreement.
N. "Chirocaine Information" means all "Chirocaine Know-how" as defined in the Chiroscience/Zeneca Agreement.
O. "Chirocaine Intellectual Property Rights" means the "Intellectual Property Rights" as defined in the Chiroscience/Zeneca Agreement.
P. "Chirocaine Assets" means:
Q. "Chiroscience Shares" means all of the stock, share capital, equity or other interest of Chiroscience owned by Respondent.
R. "Merger" means the acquisition by Zeneca of all or substantially all of the share capital of Astra.
IT IS FURTHER ORDERED that:
A. Within ten (10) business days after the date the Commission accepts this Agreement Containing Consent Order for public comment, Respondent shall transfer and surrender, absolutely and in good faith, all the Chirocaine Assets, in accordance with the Chiroscience/Zeneca Agreement.
B. Within four (4) months after the expiration of the Agreement Amending Share Subscription Agreement, Respondent shall divest, absolutely and in good faith, the Chiroscience Shares. Pending such divestiture, Respondent shall not, directly or indirectly: (i) exercise dominion or control over, or otherwise seek to influence, the management, direction or supervision of the business of Chiroscience; (ii) seek or obtain representation on the Board of Directors of Chiroscience; (iii) exercise any voting rights attached to the Chiroscience Shares; (iv) seek or obtain access to any confidential or proprietary information of Chiroscience; or (v) take any action or omit to take any action in a manner that would be incompatible with the status of Respondent as a passive investor in Chiroscience.
C. Pending the transfer and surrender of the Chirocaine Assets, Respondent shall take such actions as are necessary to maintain the viability and marketability of the Chirocaine Assets, and to prevent the destruction, deterioration, or impairment of any of the Chirocaine Assets. Respondent shall also take such actions as are necessary to maintain the viability and marketability of the Chirocaine Assets, and to prevent the destruction, deterioration, or impairment of any of the Chirocaine Assets, in accordance with the Chiroscience/Zeneca Agreement.
D. Respondent shall comply with all terms of the Chiroscience/Zeneca Agreement, and such agreement is incorporated by reference into this Order and made part hereof as Confidential Appendix I. Any failure by Respondent to comply with the requirements of such agreement may constitute a failure to comply with this Order.
E. The purpose of this Order is to ensure the continued use of the Chirocaine Assets in the same business in which the Chirocaine Assets are engaged at the time of the Merger, and to remedy the lessening of competition resulting from the Merger as alleged in the Commission's complaint.
IT IS FURTHER ORDERED that:
A. At any time after Respondent signs the Agreement Containing Consent Order in this matter, the Commission may appoint an Interim Trustee to assure that Respondent expeditiously performs its responsibilities as required by this Order and the Chiroscience/Zeneca Agreement.
B. If an Interim Trustee is appointed pursuant to Paragraph III.A. of this Order, Respondent shall consent to the following terms and conditions regarding the powers, duties, authorities, and responsibilities of the Interim Trustee:
IT IS FURTHER ORDERED that within thirty (30) days after the date this Order becomes final and every ninety (90) days thereafter until Respondent has fully complied with the provisions of this Order, Respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which it intends to comply, is complying, and has complied with this Order. Respondent shall include in such compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with the Order.
IT IS FURTHER ORDERED that Respondent shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate Respondent that may affect compliance obligations arising out of the Order, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation.
IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, upon written request, Respondent shall permit any duly authorized representative of the Commission:
A. Access, during office hours and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of Respondent relating to any matters contained in this Order; and
B. Upon five days' notice to any Respondent and without restraint or interference from it, to interview officers, directors, employees, agents or independent contractors of Respondent, who may have counsel present, regarding such matters.
By the Commission.
Donald S. Clark
ISSUED: June 7, 1999
[Confidential Appendix I Redacted from Public Version of Decision & Order]