11th Dec 2015 15:15
LONDON (Alliance News) - The UK's Competition and Markets Authority said Friday that it will undertake a phase 2 investigation of the acquisition of J Sainsbury PLC's pharmacy stores by Celesio AG, which owns Lloyds Pharmacy Ltd, as it may result in a "substantial" lessening of competition in the UK.
"The majority of consumers in the UK need to use pharmacies at one time or another and they evidently provide an important service. At a local level, pharmacies compete on a range of factors that are important to customers such as availability of medicines, waiting and opening times and the quality of advice," said CMA Senior Director of Mergers Sheldon Mills in a statement.
"After the merger, Lloyds will no longer face competition in certain local areas from one of its rivals and following our initial investigation we are concerned that this might affect choice, quality and service for customers. We think a detailed investigation is needed to look at these concerns," Mills added.
Sainsbury's agreed to sell its pharmacy business to Celesio for GBP125 million in July. Under the deal, Lloyds Pharmacy would buy 281 pharmacies in total, including 277 in-store locations and four located in hospital, to be re-branded under Lloyds Pharmacy.
Shares in Sainsbury's were down 2.6% at 235.40 pence Friday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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