By Ed Ballard
LONDON--U.K. consumer goods company Reckitt Benckiser Group PLC
(RB.LN) is facing an investigation into its acquisition of intimate
lubricant brand K-Y after a U.K. regulator said it could harm
consumers.
Reckitt, which already sells lubricant under the Durex brand,
agreed to buy the K-Y brand from Johnson & Johnson subsidiary
McNeil-PPC Inc. for an undisclosed sum last March.
In December, the U.K.'s Competition and Markets Authority said
the deal could result in a "substantial lessening of competition"
and higher prices for consumers because no other brands are
available in many shops, and asked Reckitt and J&J to take
steps to allay their concerns.
The CMA said Wednesday it is beginning "an in-depth phase 2
investigation" after measures put forward by Reckitt since December
were found to be insufficient. The CMA didn't say what the measures
were.
"The transaction will further reduce the choice available to
retailers and ultimately consumers and may give the merged company
the ability to raise prices or reduce the quality or range of these
products," said Sheldon Mills, the CMA's senior director of
Mergers.
Write to Ed Ballard at ed.ballard@wsj.com
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