A&O, Slaughters secure OFT OK for Boots-Alliance Unichem

Competition teams at Allen & Overy and Slaughter and May are celebrating a win after the Office of Fair Trading (OFT) indicated it would clear the pending £8.1bn merger between Pharmaceutical giants Boots and Alliance Unichem.

Allen & Overy corporate antitrust partner Mark Friend led the competition side of the transaction for Alliance Unichem, while Slaughter and May competition partner Claire Jeffs scooped the mandate to act for Boots.

The OFT announced it would not refer the proposed acquisition by Boots of Alliance Unichem to the Competition Commission on the condition the retailer agreed to sell about 100 stores.

OFT chief executive John Fingleton said the regulator had “concerns” about the merger, but those had been alleviated by Boots’ agreement to divest stores in areas where the number of competitors would be reduced to below three.

The OFT launched an investigation into the merger after it was announced in October, because the union was estimated to take in 40 per cent of the drug wholesale market in the UK and just under 20 per cent of its retail pharmacies.

In a statement issued by the OFT, John Fingleton criticised the Government’s anti-competitive practices.

“This is a market in which government regulations restrict competition by imposing barriers to new market entrants. As a result, cost savings arising from this merger may not be fully passed on to consumers in the form of enhanced services.”