Anticipated acquisition by Boots Group plc of Alliance Unichem plc

Affected market: Pharmacies

10 May 2006

Notice of proposed undertaking under Paragraph 2(4), Schedule 10 to the Enterprise Act 2002 (the Act).

The OFT announced on 7 February 2006 its decision that the anticipated acquisition by Boots Group plc (Boots) of Alliance UniChem plc (AU) will not be referred to the Competition Commission under section 33 of the Act because the OFT is considering whether, instead of making a reference, to accept appropriate undertakings from Boots to address the competition concerns arising from the merger. 

The OFT believes that it is or may be the case that the transaction may be expected to result in a substantial lessening of competition in relation to the supply of retail pharmacy services in certain localities in the UK where the merger removes competition or where the number of pharmacy fascia is reduced from three to two within a one mile radius.

Boots offered to give undertakings to divest either a Boots or AU pharmacy in each of the affected areas and on 14 March 2006 the OFT issued a Notice under Paragraph 2(1), Schedule 10 to the Act consulting on the proposed undertakings and suggested divestment areas.

The OFT received a total of 26 responses to the consultation. This exercise identified one additional area Southampton (Hythe) which should be included in the list of divestment areas. The OFT does not consider that any other representations made result in any further material modification being required to the draft undertakings or divestment areas set out in Annex A to these undertakings. Additionally there is also one minor change to be made to the address stated in Annex A to the proposed undertakings for the Newton Abbot AU divestment pharmacy business. 

Attached below are the draft undertakings and revised Annex A to these undertakings including the changes involving Hythe and the Newton Abbot AU pharmacy. The OFT considers that the revised proposed undertakings offered by Boots are, in the circumstances of this case, appropriate to remedy, mitigate or prevent the competition concern identified in its decision of 6 February 2006 and is minded to accept these undertakings. Before doing so the OFT is consulting on the proposed modification to the proposed undertakings concerning the inclusion of the divestment pharmacy business in Southampton (Hythe).

Download proposed undertakings (pdf 94 kb).

Download Annexe A (pdf 16 kb).

Before reaching any final decision as to whether to accept the modification to the proposed undertakings, interested parties are invited to make their views known. Representations should be made in writing to the Office of Fair Trading by 17 May 2006 and be addressed to:

David Blocksidge
Mergers Branch
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX

Telephone: 020 7211 8933
Email: david.blocksidge@oft.gsi.gov.uk

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