Sainsbury's sale of pharmacies delayed by CMA probe

The sale of Sainsbury's pharmacy business to Celesio has been delayed after the UK competition watchdog said it was launching a full investigation.

The Competition and Markets Authority has referred Sainsbury's deal to outsource the management of its pharmacies to Celesio to a 'phase 2' investigation.

Earlier this month, the CMA found 78 locations where it said could be affected by the deal and warned it would refer the merger for an in-depth probe unless Celesio offered acceptable undertakings to address the CMA’s competition concerns.

In its initial investigation, the CMA also said in several other places it had been unable to reach a positive conclusion on whether the merger gives rise to a realistic prospect of a substantial lessening of competition.

But Celesio was unmoved and has not offered to make any concessions, leading the CMA to refer the deal to a full-scale probe with a deadline of 13 June 2016.

Shares in Sainsbury's were down 0.6% to 264.8p by 1145 GMT on Tuesday.