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Co-op takeover bids face competition probe

Alliance Boots and Lloydspharmacy bids for the Co-op pharmacies could be investigated by the Competition and Markets Authority to ensure they do not restrict patient choice

Alliance Boots and Lloydspharmacy bids for the Co-operative Group's pharmacies could be investigated by the Competition and Markets Authority to ensure they do not restrict patient choice, a lawyer says


Alliance Boots and Lloydspharmacy could be investigated by the UK's competition regulator if they try to buy the Co-operative Group's pharmacies, a legal expert has said.

The Competition and Markets Authority (CMA) would review a takeover bid by either of the multiples to ensure it did not restrict patient choice, said Lindsay Draffan, an associate at law firm Hempsons.

The regulator had the power to stop the deal going ahead or force the prospective buyer to offload some of the pharmacies to a competitor, said Ms Draffan, an expert in competition law.

The Co-operative Group told C+D last week (June 30) that bids for its 782 pharmacies were at an "advanced stage". Alliance Boots made an offer for the Co-operative Pharmacy in May. Lloydspharmacy's parent company Celesio told C+D on Friday (July 4) that it could not comment on claims in the Sunday Times last month that it had also made an offer.

Under the Enterprise Act 2002, the CMA can examine the takeover of any company with an annual turnover of more than £70 million to decide whether it will restrict consumers' choice, Ms Draffan told C+D. The Co-operative Group's pharmacy business reported sales of £760m last year, according to its latest financial report.

If the CMA identified a problem in an initial two-month analysis of a deal then it could launch an "in-depth" investigation, which could take up to six months, Ms Draffan said. Because Alliance Boots and Lloydspharmacy already had a substantial share of the market it was likely that the CMA would investigate any offer they made, she said.

The investigation would look at the Co-operative Group's pharmacy branches individually to see whether their sale would reduce patient choice in their area, she said.

Although it is voluntary for a buyer to notify the CMA if they think a deal could breach competition law, Lloydspharmacy and Alliance Boots would be highly likely to notify if the legal thresholds were met, Ms Draffan said. The CMA would probably become aware of the deal even if it was not notified and a subsequent investigation would delay the sale further, she said.

The "cash-strapped" Co-operative Group would not want a CMA investigation to hold up the sale and therefore might favour a bid from a private equity firm with no existing market presence, she added.

The Co-operative Group last week reiterated its expectation "that we will sell the business in its entirety during the course of 2014".

What do you think would be the best outcome for the Co-operative's pharmacies?

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Dale Peacock, Dispensing assistant

it doesnt matter that lloyds and boots have 50% of the market. tesco and all the other big supermarket brands are putting lots of business's out of business... where as lloyds and boots arent. I work for lloyds. if lloyds want to buy out co-op. good on them.. of boots want to do the same.. good luck to them. as long as patients get their meds. thats all the matters.. business growth will happen regardless....

Caroline Jones, Community pharmacist

Really??? What planet do you live on????

Grumpy Pharm, Community pharmacist

No news here. File along with "is the pope catholic" story. Since when was "crackers" part of a legal view anyway? Good grief!

Er Ds, Superintendent

tariq- walgreens is boots!!! suggest you stick to dispensing brother

Robert Rees, Manager

I think Walgreens own 43% of Alliance Boots, with the option to buy the rest next year.
So you were almost correct Er Ds

Tariq Atchia, Pharmacy Area manager/ Operations Manager

How about if Walgreens buy it...

Chris Pharmacist, Community pharmacist

The latest I heard was that Carlyle, a US company that owns the RAC have been succesful. Surely some relief that Boots or Lloyds haven't been succesful which probably would have been a very unpleasant experience for many Co-op employees but is it better the devil you know?

One things for certain, the option for individual pharmacists to buy the pharmacies one by one was never going to happen, not when multinational companies smell £.

Disillusioned Pharmacist, Community pharmacist

Where did you hear that about the US firm Chris? I thought there was a non-disclosure agreement.

Robert Rees, Manager



Money talks......

Naina Lad, Pharmacy technician

I think they should sell the individual practices to an open market to independent buyers they would generate money for the coop group as a whole

Gerry Diamond, Primary care pharmacist

Just routine process for most take over bids...not great news.

Chris Locum, Locum pharmacist

There should be no maybe about it. Any chain should have their bid monitored. I have seen too many chain pharmacies in local areas over the years and there was not so much as a whimper from monopolies/mergers commission or whatever they are called.

Caroline Jones, Community pharmacist

Exactly. Asda, Sainsburys, Tesco, Morrison's and Waitrose aren't allowed this!



Lloyds/boots already have 50% share of the market........

Caroline Jones, Community pharmacist

Of course it will restrict patient choice if Boots or Lloyds bought them - it's a 'no brainer'. The issue is, do the powers that be think this is a problem? Obviously not, going by previous takeovers by Boots/Lloyds as there are a few examples in my area of there being two ' Boots shops' on the same street!!!!!
Pharmacy should have gone down the dentist/optician/doctor/accountant/solicitor route years ago - as in forming 'partnerships' between professionals

Career Miss Take, Locum pharmacist

from my exerience I haven't encountered a more demoralised work force than at Boots. Good luck Co-op. Aren'rt you doing something wrong Boots. Do you care?

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