29th Apr 2016 07:48
LONDON (Alliance News) - The UK's Competition & Markets Authority on Friday said Celesio AG may have to sell 13 pharmacies across England and Wales in order to get approval for its takeover of J Sainsbury PLC's pharmacy business.
Celesio struck a deal to acquire Sainsbury's pharmacies in July last year for GBP125.0 million and the deal was referred to a Phase 2 investigation by the UK regulator in late December.
The CMA said Celesio, through its Lloyds Pharmacy Ltd subsidiary, currently operates around 1,540 pharmacies in the UK and now plans to buy 277 Sainsbury's stores.
The CMA's panel investigating the merger identified 13 areas in England and Wales where the two pharmacies are such close competitors that the merger will result in the substantial lessening of competition.
"We have provisionally found that after the merger Lloyds will no longer face sufficient competition in 13 areas and expect that in these areas customers will lose out. We are now inviting responses to these provisional findings and will discuss ways in which we can address our concerns," said Simon Polito, the chair of the inquiry.
Sainsbury's shares were down 0.3% to 290.9 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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