The UK’s competition watchdog is looking at the proposed acquisition of Sainsbury’s pharmacy business by Lloydspharmacy on the grounds that it may “reduce market competition”.
The Competition and Markets Authority (CMA) made the announcement on 9 September 2015 and is inviting comments on the proposed business deal to help inform its decision.
The CMA move comes two months after Lloydspharmacy — part of Celesio AG — and Sainsbury’s revealed their acquisition plans, which they hope to introduce by February 2016.
Under the deal, Lloydspharmacy — the UK’s second largest retail pharmacy company with more than 1,500 stores — will pay annual rent to Sainsbury’s for each of its 277 in-store pharmacies. It will also acquire four Sainsbury’s pharmacies located in hospitals as part of the new business plan worth £125m. All pharmacies will be rebranded as Lloydspharmacy.
The CMA — which has the power to intervene if it believes the proposals would damage market competition — is inviting comments until 23 September 2015. Its investigation will consider whether the proposals would in practice be a “merger” and the impact it would have on the community pharmacy market.
The CMA expects to make its decision on 11 November 2015.