CCI Approves Pharmeasy’s Merger with Medlife
E-pharmacy companies Medlife and PharmEasy had sought CCI’s (Competition Commission of India) approval on the merger in mid-August to which the CCI has responded in the merger’s favor on Tuesday, this week. API Holdings, the parent entity of PharmEasy will acquire 100% equity shares of Medlife. In reprisal Medlife’s promoters will get a 19.95% stake in the merged entity according to the formal filing.
The deal is expected to lead up to $200 Mn to $250 Mn and could value the combined entity at $1.2 Bn. Since the pandemic, massive investment and acquisitions are seen in this sector.
The merger is seen as a landmark since giants like Amazon and Reliance have set foot in the E-pharmacy sector. Recently, Mukesh Ambani led Reliance has entered the digital space by acquiring a majority stake in pharmacies startup Netmeds. Amazon has also launched ‘Amazon Pharmacy’ to deliver in select cities while flipkart has expanded its homeopathy and allopathy offerings.
The merger was expected to face hurdles in approval as the South Chemist and Distributors Association (SCDA) had approached the Competition Commission of India (CCI) to regulate the E-pharmacy sector. The body addressed in a letter that they are against the merger claiming that the online sales of medicines are not legal under Indian law.
The National Digital Health Mission (NDHM) containing guidelines to regulate the E-pharmacy sector needs to be finalized to avoid misinformation. The sector needs to be regulated to ensure safety and reliability amidst rising competition in the sector.