Clicks is acquiring 25 Pick n Pay pharmacies
- The Competition Commission has made a number of key recommendations for big deals to be approved
- It gave the go-ahead for Clicks the green light to acquire 25 Pick n Pay retail pharmacies and RFG Foods to acquire Pioneer Foods Wellingtons’ frozen food business
- It also recommended that the Competition Tribunal approve Dis-Chem’s bid for a stake in healthcare services company Kaelo Holdings.
The Competition Commission has made a number of key recommendations for approval, including giving retail pharmacy Clicks the green light to acquire 25 Pick n Pay retail pharmacies.
Clicks’ competitor Dis-Chem also had good news, with the commission recommending that the Competition Tribunal approves its bid for a stake in Kaelo Holdings, which provides services to people who are not part of a medical scheme. This is a major leg-up for Dischem in its bid make the affordable healthcare market an area of growth.
The commission also gave Ma Baker owner RFG Foods, the go-ahead to acquire Pioneer Foods Wellingtons’ frozen food business. The Pioneer Foods subsidiary makes and distributes a variety of frozen food products such as pies, pastries and sausage rolls under the Today, Mama’s, Big Jack and Man’s Meal.
Clicks owns about 620 retail stores across the country, as well as United Pharmaceutical Distributors, Unicorn Pharmaceuticals and Clicks Direct Medicines.
However, the deal came with market concerns about the growth of corporate pharmacy retail chains, and the decline of independent pharmacies. In the past five years, Clicks has made more than 80 acquisitions.
As such, the commission included the condition that Clicks inform it of its future acquisitions of retail pharmacies, including those below merger thresholds.
Both Pick n Pay and Clicks agreed that the pharmacy retailer will not be restricted from competing with the retailer on over the counter product sales, at its stores where it will operate the pharmacies. They also agreed that the proposed merger will not result in retrenchments.
No public interest concerns
With Dischem and Kaelo, the commission found that the acquisition “is unlikely to result in a substantial prevention or lessening of competition in any relevant market”.
“The commission further found that the proposed transaction does not raise any public interest concerns.”
However, the recommendation came with the condition that Dis-Chem notify it should it acquire more of Kaelo, making it a controlling shareholder.
With RFG’s bid for Pioneer Foods Wellingtons’ frozen food business, the commission said that while the deal was unlikely to prevent or lessen competition, it was concerned about possible retrenchments.
As a result, RFG and Pioneer Foods agreed that no employees would be retrenched and any workers affected by the merger would be moved to other parts of either of the two businesses.
The companies also agreed to provide a maximum of R15 000 for the reskilling of employees who can’t or don’t want to be redeployed and to offer those who are retrenched preferential employment for two years from the merger’s implementation.