The owner of LloydsPharmacy may have to sell 13 outlets in order to get the green light to buy Sainsbury's £125 million pharmacies business, the UK's competition watchdog has said.
The Competition and Markets Authority (CMA) said it has found 13 areas where German healthcare firm Celesio, which owns LloydsPharmacy, and Sainsbury's own sites were so close to one another that the takeover would damage competition and give consumers less choice.
Sainsbury's agreed to sell the business, which it launched more than 20 years ago, to Celesio last July. LloydsPharmacy is the UK's second biggest chain behind Boots with around 1,540 outlets, while the Sainsbury's has 277 stites.
Simon Polito, who chaired the CMA inquiry into the takeover, said: "We have provisionally found that after the merger Lloyds will no longer face sufficient competition in 13 areas and expect that in these areas customers will lose out."
The CMA said LloydsPharmacy should consider selling outlets in the affected areas.
Mr Polito added: "This is a market in which the scope for competition is reduced compared with many retail mergers."
Sainsbury's first launched its in-house pharmacy business in 1995.
The deal will see all of the Sainsbury's pharmacies rebranded as LloydsPharmacy.
The 13 affected regions are: Beaconsfield, Bracknell, Cardiff, Christchurch, Kempston, Kidlington, Leeds, Liverpool, Sutton Coldfield, Luton, Warlingham, the Reading-Calcot-Theale area, and the Sandy-Potton-Biggleswade area.