The Competition and Markets Authority (CMA) has announced that the merger of Bestway, parent company of Well Pharmacy and independent pharmacy owner Lexon UK could “lessen the competition between retail pharmacies” in England.
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.
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: “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.