The Competition and Market Authority (CMA) is primed to rubberstamp the deal following Bestway’s proposal to sell off seven of its Well Pharmacy branches, it indicated in an update yesterday (July 27).
In April, Bestway, which operates approximately 750 pharmacies under the Well Pharmacy brand, announced that it had acquired Lexon UK Holdings, a wholesaler that also operates 46 community pharmacies in England, and another wholesaler, Asurex.
But in June, the Competition and Markets Authority (CMA) decided that the merger “may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom”, sparking Bestway’s proposal to sell off seven pharmacies in affected areas.
Read more: Seven-pharmacy divestment mooted amid Well/Lexon competition concerns
Now the CMA has said the proposed sales – for which upfront buyers have been secured – will resolve its competition concerns about the merger in a “clear-cut manner”.
Although the CMA “proposes to accept” the divestments, it is running a consultation period on the proposals until August 11. However, the next steps in the competition probe may change in light of the responses received by the watchdog, which would be subject to further consultations, it said.
Affected Well Pharmacy branches
The seven affected pharmacies, which the CMA said will be sold to six upfront purchasers, are:
- Well Seaham, to be purchased by Teesside LLP, trading as Riverside Pharmacy
- Well Bishop Auckland, to be purchased by HA Healthcare Ltd
- Well Moreton, to be purchased by Gorgemead Limited, trading as Cohens Chemist
- Well High Howdon, to be purchased by S K Pharmacare Limited
- Well Pensby, to be purchased by Gorgemead Limited, trading as Cohens Chemist
- Well Kenton, to be purchased by Alrahi & Singh Limited
- Well Stockton-on-Tees, to be purchased by Pyramid Pharma 7 Ltd
The transfers are subject to the NHS consenting to a change of ownership, although the CMA considers the purchasers as suitable, it said
Read more: Well parent company’s merger with Lexon sparks competition concerns
The watchdog identified 12 areas where the Bestway/Lexon merger might result in a substantial lessening of competition. As there was “some overlap”, the CMA accepted that Bestway’s proposal to sell seven Well pharmacies “would achieve a clear solution” to its concerns, it said.
Bestway: We'll “work collaboratively” with CMA
Bestway’s CEO Seb Hobbs told C+D that “choice and competition are an essential part of making sure people get the best deal from their community pharmacies”.
Read more: Louis Purchase steps down as operations director at Well Pharmacy
Mr Hobbs said that Bestway will “continue to work collaboratively” with the regulator.
“All pharmacies identified for potential divestment continue to operate as normal and are receiving our full support," he said.
