Reckitt forced to license K-Y brand as UK regulator approves deal

12th Aug 2015 10:38

(ShareCast News) - Reckitt Benckiser has been given clearance from the UK's competition regulator to buy the K-Y lubricants brand from Johnson & Johnson, but the consumer goods company will be forced to license out the brand to a UK competitor to alleviate concerns over competition.The Competition and Markets Authority said on Wednesday that Reckitt, which owns the Durex condom brand, will need to license the K-Y brand in the UK to a third party for eight years, during which time the other company will be given the chance to develop a new brand to compete with the Durex range."Based on the evidence assessed in the round, we concluded that the Durex and K-Y brands are substitutes to some consumers and impose a competitive constraint on each other," the CMA said.Reckitt agreed to acquire the K-Y brand in March 2014, but the CMA said in December of last year that the deal could lead to a substantial lessening of competition and higher prices for consumers.The regulator asked both companies to implement measures to alleviate competition concerns, but when these were put forward, the CMA deemed them insufficient and launched an investigation into the deal.At 1101 BST, Reckitt shares were 3% lower at 5,940p.