Reckitt Benckiser’s bid for personal lubricant-maker KY came unstuck yesterday as regulators ordered a full competition investigation.
The combined group owns the Durex and KY brands worldwide, but is awaiting regulatory approval in the UK. The Competition and Markets Authority (CMA) worries it will gain it an unduely dominant position in the market by owning the two major retail brands.
Retailers complained to the CMA that the combination of the two giant lube firms could affect pricing of the products and hurt consumers.
In December, the regulator asked Reckitt to alter the bid: “Unless Reckitt Benckiser and [KY’s seller] Johnson & Johnson offer undertakings that resolve these concerns, it is necessary to investigate the transaction in greater detail,” said the CMA’s Sheldon Mills.
The firm offered to make some changes, but has not made these public. “After careful consideration the CMA was not confident that these would resolve the concerns in a clear-cut manner,” the CMA said yesterday.
The firm remained upbeat. “RB remains confident that a more thorough analysis will confirm that the acquisition of the KY brands will benefit consumers in the UK,” it said in a statement.