Bulgaria's Sopharma Trading cleared to buy nine Royal Pharmacy stores

The notified transaction will lead to a horizontal overlap on the Bulgarian pharmaceuticals retail market, as well as vertical effects due to Sopharma group's involvement in the production and wholesale of pharmaceuticals, the Commission on Protection of Competition (CPC) said in a statement.

However, the deal will not impact competition on the market due to the open market entry, the number of competitors and customer mobility. It also does not significantly affect competition on the vertically connected markets.

The transaction will grant Sopharma Trading control over nine stores under the Royal Pharmacy brand in the cities of Sofia, Pernik, Radomir and Dupnitsa, which are operated by companies wholly owned by private investor Andrey Georgiev. It is expected to yield a combined market share of between 10% and 20% in terms of revenue and 5-10% in the number of pharmacies.

With the deal, Sopharma Trading seeks to enter the market in Radomir, strengthen its positions in Pernik and Dupnitsa and boost its competitiveness in Sofia, the CPC said.

Sopharma Trading is a unit of Bulgarian pharmaceuticals producer Sopharma [BUL:SFA] and operates over 200 pharmacies under the SOPharmacy brand in more than 40 cities across the country.

In August, Sopharma Trading said it agreed to acquire the nine pharmacies, which will become part of the company's retail chain SOPharmacy once the deal is completed.

As of 1145 CET on Wednesday, shares in Sopharma Trading changed hands 0.83% higher at 6.05 levs ($3.35/3.09 euro) on the Bulgarian Stock Exchange.

(1 euro = 1.95583 levs)