U.S. health care company McKesson has agreed to sell 28 drugstores to win approval from the Competition Bureau for its deal to buy the Rexall Health pharmacy chain.
The Canadian regulator says the proposed $3-billion acquisition of Rexall would "likely result in a substantial lessening or prevention of competition" if it was allowed to go ahead as originally planned.
Under a consent agreement with the Competition Bureau, McKesson will also restrict the exchange of "commercially sensitive information" between its wholesale and Rexall retail business, in order to preserve competition at the retail level.
The locations pegged for sale are located in small communities in Ontario, Alberta, Saskatchewan, B.C. and the Northwest Territories.
Last March, Calgary-based Katz Group announced that it was selling its 470 Rexall retail pharmacies to McKesson, a company it has worked closely with for 20 years.
In 2012, McKesson acquired Katz's independent outlets and franchise businesses – primarily operating as I.D.A. and Guardian – for about $920-million.
The San Francisco-based McKesson is the largest wholesaler of pharmaceutical products in Canada.
Editor's note: An earlier digital version of this story incorrectly stated that 26 stores, not 28, were involved in the deal. This version has been updated.