Pharmacy Daily | ACCC gives go-ahead for API takeover

RETAIL conglomerate, Wesfarmers, is another step closer to completing its acquistion of Australian Pharmaceutical Industries (API), with the Australian Competition and Consumer Commission (ACCC) revealing it would not oppose the deal.

The competition watchdog's Commissioner, Stephen Ridgeway, gave the green-light for the takeover this morning, following a review of the bid (PD breaking news).

"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," he said.

"We consider that API's competitors will continue to compete strongly with Wesfarmers after the acquisition."

Ridgeway said the ACCC had considered the impact of Wesfarmers owning both the Priceline Sister Club loyalty scheme and having a 50% stake in the Flybuys program would have on competition within the retail environment, by incentivising or locking customers into shopping at Wesfarmers-aligned pharmacies.

However the regulator found that "Wesfarmers acquiring the Priceline Sister Club loyalty scheme will not have a lock-in effect on consumers in any market".

"We also consider the benefits obtained from the additional customer transaction data do not appear to be so strong as to result in a substantial lessening of competition from the acquisition," he said.

"Customers generally do not only join one loyalty scheme, and major competitors to Wesfarmers after the acquisition will have, or could start, their own customer loyalty schemes."

In a statement to the Australian Securities Exchange (ASX), Wesfarmers noted that "clearance from the ACCC was a condition precedent for the transaction".

"Subject to the satisfaction of the remaining conditions, including approval by API shareholders, completion of the transaction is expected to occur around the end of the first quarter of the 2022 calendar year," the company said.

Responding to the ACCC's announcement, API told the ASX that and explanatory statement regarding the Scheme of Implementation Deed announced in Nov 2021 (PD 08 Nov 2021), is expected to be released next week.