Considering intervention in Karo Healthcare’s acquisition of Aco Hud Nordic

The Norwegian Competition Authority (NCA) is considering intervening in Karo Healthcare’s proposed acquisition of Aco Hud Nordic. According to the Authority’s preliminary assessment, the transaction may significantly impede effective competition in the market for therapeutic skincare products.

The parties have received the Authority’s Statement of Objections. Karo Healthcare AB and Aco Hud Nordic AB both offer a broad range of personal care brands, and they overlap in the supply of therapeutic skincare products.

Therapeutic skincare products include ointments, creams and lotions intended to moisturise and strengthen the skin barrier, and which are used to treat a variety of skin conditions of differing types and severity – from dry skin and mild eczema to more serious conditions such as atopic dermatitis and psoriasis.

– We are concerned that reduced competition may lead to higher prices and lower quality for customers. We have therefore issued a notice that we are considering intervening in the transaction. Higher wholesale prices for pharmacies may result in higher prices for consumers who rely on therapeutic skincare products, says Department Director Marita Mæland Skjæveland.

The Authority’s preliminary assessment is that the parties are close competitors, whereas other suppliers are more distant alternatives. The Authority also considers that there are significant barriers to entry in this market.

– Following the transaction, Karo Healthcare and Aco Hud Nordic would become the clearly largest player in the market, and market concentration would increase significantly, says Project Manager Johannes Hjartlie.

During the investigation, Karo Healthcare submitted proposed remedies intended to address the Authority’s concerns. The Authority’s preliminary assessment is that these commitments are insufficient to eliminate the competition concerns arising from the acquisition.

The Authority emphasizes that today’s notice is not a final decision. Under the Norwegian Competition Act, the parties now have 15 working days to comment on the Authority’s preliminary assessment. The Authority then has a further 15 working days to adopt a final decision in the case.