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Boots is expected to be forced to sell a parcel of the stores it has acquired in its takeover of the Dollond & Aitchison (D&A) optical chain in order to satisfy the competition authorities.
Although the deal is ultimately expected to be cleared, the Office of Fair Trading (OFT) is likely to take a very close look at those areas in which both Boots Opticians and D&A have outlets, amid concern that Boots may seek to close one of them down.
After its 30-day investigation, the OFT is expected to refer the case to the Competition Commission for a more formal inquiry.
Boots on Thursday said that there were only a “limited” number of cases of overlap between the two chains, but would not give a number. The rival Specsavers said that the overlap was “huge”.
Either way, Boots is likely to be asked to sell at least some of its stores to rival operators to ensure that consumers do not lose out should Boots decide to close one of the operators.
If the competition authorities were to force divestments, the process would echo a deal struck this week between the OFT and the Co-operative Group, which is acquiring Somerfield. Under the deal, the Co-op will part with 133 stores in areas where both it and Somerfield operate.
It is possible that the Boots deal could be handled by EU competition regulators, although Brussels is concerned only with deals in which each party has a €250 million (£226 million) turnover before the deal and a €5 billion combined turnover as a merged entity. It was unclear last night whether the Boots deal is in that category.
The takeover of D&A is the first UK deal by Alliance Boots since its acquisition by Kohlberg, Kravis, Roberts, the buyout firm, in June 2007.
A combination of Boots Opticians and D&A would have about 16 per cent of the UK market, by revenues, compared with about 22 per cent for Specsavers, according to Mintel, the research agency.
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