Bestway snapped up the "family-owned" Lexon UK, which operates 46 UK pharmacies under the Knights Pharmacy brand, in April as part of a deal that also encompassed Lexon’s wholesaling business and the perfume wholesaler Asurex. 

Meanwhile, Bestway operates approximately 750 pharmacies nationwide in the UK under the Well Pharmacy brand.

But a “fast track” probe from the CMA raised concerns that the deal “could lead to a significant lessening of competition between retail pharmacies” in 12 areas in Liverpool and the north east of England, the watchdog said today (June 15).

Read more: UPDATED: Well Pharmacy acquires wholesaling businesses Lexon UK and Asurex

According to the CMA, the merging businesses have submitted proposals to sell off some pharmacies in the affected areas after conceding that “the deal raises competition concerns” in those locales.

It is unclear how many pharmacies could be sold under the proposals or which of the pharmacy chains could be affected.

At the time of the merger, the companies said they had “proactively engaged with the CMA in pre-notification discussions and look forward to continuing to do so productively during the CMA review period”.

 

Choice "vital"

 

Well Pharmacy's CEO Seb Hobbs told C+D that the multiples "believes really strongly that choice and competition are vital in community pharmacy".

"We will continue to work with the CMA to identify the right solution or solutions to make sure that competition is properly maintained in the affected areas," he added. 

Meanwhile, the CMA’s senior director of mergers Colin Raferty said that the competition watchdog will “carefully consider whether the remedy put forward by Bestway will address our concerns and ensure that customers in the affected areas continue to have access to good quality chemists”.

It was “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”, he said.

The CMA noted that its investigation did not identify any competition concerns over parts of the merger relating to “certain pharmaceutical wholesale activities as well as [the] perfume wholesaler Asurex Limited”.

Lexon UK has five depots in Redditch, Leeds, Durham, East Kilbride and Dublin, while its pharmacy business operates branches across the midlands and the north west and north east of England.

Read more: Well Pharmacy reveals it has taken on ‘a number of’ ex-Lloydspharmacy staff

Although Lexon UK is "primarily" a wholesaler catering to 3,000 retail pharmacy customers across the UK and Eire, it is also "a specialist developer and manufacturer of generic pharmaceuticals and is a data and solutions provider to pharmacy", the company said in April. 

At the time, Mr Hobbs said the multiple was "delighted" to welcome Lexon and Asurex's 1,200 team members to the company.

“These are incredibly challenging times for community pharmacy, so we’re really pleased to be able to have an opportunity to show our commitment to the sector, now and into the future,” said.

Read more: All Sainsbury’s Lloydspharmacy branches to close by tomorrow, chain confirms

And Lexon UK's managing director, Anup Sodha, said that staff should "look forward to a bright future, with the added security of being part of a larger group with the investment, opportunities and benefits that will provide". 

It comes following the news, revealed exclusively by C+D yesterday (June 15), that Well Pharmacy has taken on "a number of" Lloydspharmacy staff following the multiple's withdrawal from Sainsbury's supermarkets this year.

Well Pharmacy had previously pledged that there would be “lots of roles available for staff affected by the news”. 

C+D exclusively revealed on Monday (June 12) that of June 13 would mark the end of all Lloydspharmacy branches located in Sainsbury's stores.