Conglomerate giant Wesfarmers (ASX:WES)
is another step closer to acquiring Australian Pharmaceutical Industries (ASX:API)
after the competition regulator gave it the tick of approval.
The Australian Competition and Consumer Commission said it will not oppose the proposed acquisition. The ACCC’s review primarily focused on the markets for the retail sale of over-the-counter pharmaceutical and beauty & personal care products.
“Our investigation showed that there are many large and well-established retailers, including Chemist Warehouse, Woolworths and Coles, that will compete strongly with Wesfarmers after the acquisition in both the market for over-the-counter pharmaceutical products and the market for beauty & personal care products,” said ACCC commissioner Stephen Ridgeway.
Wesfarmers' said the ACCC also considered the potential effects on competition of Wesfarmers owning both the Priceline Sister Club and 50 per cent of Flybuys.
The investigation focused on whether the proposed acquisition would reduce competition by incentivising and locking customers into shopping at Wesfarmers-aligned pharmacies and providing Wesfarmers with access to increased customer data.
“Wesfarmers acquiring the Priceline Sister Club loyalty scheme will not have a lock-in effect on consumers in any market.”
Shares in Wesfarmers (ASX:WES)
are trading 0.8 per cent lower at $52.99. Shares in Australian Pharmaceutical Industries (ASX:API)
are trading 0.2 per cent higher at $1.52.