The Competition and Markets Authority (CMA) has announced on Tuesday (20 June) that it may consider undertakings offered by Bestway Panacea Holdings, a parent company of Well Pharmacy, which involves divesting seven pharmacy stores under the merger deal with Lexon UK.
The Authority said: “CMA considers that there are reasonable grounds for believing that the undertakings offered by Bestway, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002.”
Last week, the Authority had announced that the merger of Bestway, and independent pharmacy owner Lexon UK could “lessen the competition between retail pharmacies” in England.
On 26th May 2023, CMA announced the launch of its merger inquiry. A fast-track Phase 1 investigation found that the merger could lead to a significant lessening of competition between retail pharmacies in 12 local areas located in Liverpool and North East England.
The merging businesses conceded that the deal raises competition concerns in these areas and have submitted proposals to sell pharmacies within these areas to restore the competition that would otherwise be lost as a result of the deal.
Colin Raftery, CMA Senior Director of Mergers, said on Thursday (15 June): “Pharmacies are essential public health services, and it’s vital that the loss of competition brought about by a deal like this shouldn’t leave people with reduced choice or worse services when they need medical support.
The CMA will now carefully consider whether the remedy put forward by Bestway will address its concerns and ensure that customers in the affected areas continue to have access to good quality chemists.
The merger will be referred for a phase 2 investigation unless the parties offer acceptable undertakings to address these competition concerns.”
Bestway operates approximately 750 pharmacies nationwide in the UK under the Well brand. In April 2023, it completed its acquisition of Lexon, which operates 46 pharmacies in the UK under the Knights Pharmacy brand, and Asurex, a wholesale perfume supplier.
