Press release

Solutions offered to protect consumers in pharmacy deal

CMA’s investigation into Bestway’s purchase of Lexon and Asurex has confirmed competition concerns

From:
Competition and Markets Authority
Published
15 June 2023

Image credit: iStock

A fast-track Phase 1 investigation by the Competition and Markets Authority (CMA) has confirmed that the purchase of independent pharmacy owner Lexon UK Holdings Limited (Lexon) by pharmacy chain operator Bestway Panacea Holdings Limited (Bestway) would raise competition concerns in several local areas.

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.

The CMA’s 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 our concerns and ensure that customers in the affected areas continue to have access to good quality chemists.”

More information can be found on the Bestway/Lexon/Asurex case page.

Note to editors:

  1. The businesses to be acquired by Bestway include certain pharmaceutical wholesale activities as well as perfume wholesaler Asurex Limited (which trades as Knights Fragrances). No competition concerns were identified in relation to these product areas.

  2. The CMA is required to issue a Phase 1 decision within 40 working days. Using the ‘fast track’ procedure has allowed the CMA to conclude its Phase 1 investigation within 13 working days of launch, well ahead of the 40 working day deadline for initial merger decisions.

  3. Merging parties are required to formally offer proposed remedies (undertakings in lieu (UILs)) within 5 working days after receiving the CMA’s Phase 1 decision and the CMA then decides, within 10 working days after the Phase 1 decision, whether to provisionally accept the UILs offered. The CMA then has 50 working days (subject to an extension of up to 40 working days) to consider whether to finally accept these remedies.
  4. The transaction completed on 14 April 2023. The CMA served an initial enforcement order on 14 April 2023 under section 72(2) of the Enterprise Act 2002 on Bestway Healthcare Holdings Limited, Bestway Healthcare Finco Limited, Bestway Panacea Holdings Limited, Kericho Holding Limited, Lexon UK Holding Limited and Norchem Healthcare Limited.
  5. More information on the CMA’s fast track procedure can be found in section 7 of Mergers: Guidance on the CMA’s jurisdiction and procedure.
  6. All media enquiries should be directed to the CMA press office by email at press@cma.gov.uk, or by phone on 020 3738 6460.
Published 15 June 2023