Celesio AG, through its subsidiary Llyods Pharmacy Ltd, has agreed to acquire the in-store pharmacy of Sainsbury’s Supermarket Limited.
The Competition and Markets Authority (CMA) believes that the Celesio AG and Sainsbury’s Pharmacy will no longer be distinct and will have created a merger situation.
In December 2015 the CMA assessed the impact that the merger would have on retail supply prescription only medicines, pharmacy medicines, and pharmacy services to end-customers in local areas in the United Kingdom. They also assessed the impact the merger would have on the supply of outpatient dispensing services to hospitals in the UK, and the vertical relationship in the wholesale distribution of prescription only and pharmacy medicines, and the companies’ presence in the retail pharmacy sector.
Competition and Markets Authority decision
Following a competitive assessment at a local level, the CMA came to the decision that the merger of the two companies would give rise to a realistic prospect of a substantial lessening of competition in 12 areas.
As the CMA decided that the merger would cause a substantial lessening of competition in pharmacy retailing, it did not conclude whether the merger would give rise to a lessening of competition in relation to the outpatient dispensing services and the vertical relationship.
In April, Celesio AG offered undertakings in order to prevent pre-emptive actions. A Notice of extension of inquiry was issued and it was extended to 8 weeks up to the 8th of August 2016. We are waiting to hear the final verdict of whether the undertakings have been accepted or not.
Keeping up-to-date
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