API deal approved by ACCC

WESFARMERS is one step closer to completing its planned $763m acquisition of Australian Pharmaceutical Industries after the consumer watchdog approved the deal.

The Australian Competition and Consumer Commission said on Friday it would not oppose the acquisition of API, which owns several pharmacy chains, including Priceline and Soul Pattinson Chemist.

It said that a takeover by Wesfarmers was unlikely to reduce competition within the market because there was already many large and well-established businesses in the sector that would compete “strongly” with API, including Chemist Warehouse, Woolworths and Coles.

“We consider that API’s competitors will continue to compete strongly with Wesfarmers after the acquisition,” ACCC commissioner Stephen Ridgeway said.

The regulator conceded that while most stakeholders had little concern about the owner of Kmart and Bunnings acquiring API, there was a small number of industry participants who were worried about competition.

“After considering these concerns, the ACCC maintained its view that the proposed acquisition would not have the effect or likely effect of substantially lessening competition,” the ACCC said.

Wesfarmers shares fell 1.1 per cent to $52.80 while API rose half a cent to $1.52.