CMA begins inquiry into Pharmacy2U/Lloyds Direct merger

The decision for phase one inquiry may be announced on or before March 19

Britain's antitrust regulator, the Competition and Markets Authority (CMA) on Wednesday announced that it is investigating the acquisition of LloydsDirect by Pharmacy2U last year, and has launched its first phase of the merger inquiry.

The completed deal between two of the UK’s foremost online pharmacies was announced in a joint statement issued on 9 October, confirming that they would operate as Pharmacy2U.

Commenting on the purchase, Kevin Heath, CEO of Pharmacy2U, then said: “Combining the best of both of our businesses, we can provide patients with greater access and convenience.”

The regulator is considering “whether it is or may be the case that this merger has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

It is inviting comments on the transaction from any interested party to assist the regulator with this assessment.

Written representations about any competition or public interest issues can be sent until 6 February 2024, with March 19 set as the deadline for announcing the decision on its phase one inquiry.

However, the current statutory deadline is subject to change as “the deadline of a given case may change during the merger assessment process due to different reasons”, it said

On 28 November 2023, the CMA served an initial enforcement order under section 72(2) of the Enterprise Act 2002 on Pharmacy2U, P2U Holdings Limited, G Square Capital II L.P., G Square Healthcare Private Equity LLP, and Lloyds Direct.

The competition regulator stated that it has “reasonable grounds for suspecting that it is or may be the case that Pharmacy2U and Lloyds Direct have ceased to be distinct.”