Chemist Warehouse merger with Sigma Healthcare to list on ASX

Chemist Warehouse could merge with Sigma Healthcare to become a publicly listed company on the Australian Securities Exchange (ASX).
Chemist Warehouse merger

Two of Australia’s biggest pharmacy retailers, Sigma Healthcare and Chemist Warehouse could merge in a bid to become a publicly listed company on the Australian Securities Exchange (ASX).

The parent company of Amcal, Sigma Healthcare, has announced plans to acquire Chemist Warehouse for $700 million.

If successful, it’s believed the two companies will have a combined worth of $8.8 billion.

Sigma Healthcare

Sigma Healthcare’s sales revenue for the 12 months to 31 January 2023 was $3.66 billion.

The company owns pharmacy retail stores under the Amcal, Guardian, and Discount Drug Stores brands. It also offers various support and programs to pharmaceutical manufacturers and retailers.

Additionally, Sigma has been approved for a $1 billion loan from ANZ and NAB to facilitate the purchase of Chemist Warehouse.

Chemist Warehouse

Chemist Warehouse has over 600 stores across Australia. It also part-owns stores in New Zealand, China and Ireland.

The privately-owned company reported an after-tax profit of over $300 million in the last financial year.

Under the deal with Sigma, Chemist Warehouse founders Mario Verrocchi, Jack and Sam Gance will get 49% ownership of the merged company. Verrocchi and Jack Gance will hold board positions.

The Pharmacy Guild

The Pharmacy Guild of Australia has raised concerns over pharmacy competition and patient care.

Further, the Guild said in a statement that the existing pharmacy model has allowed access to medication “without putting profit over patient care.”

What next?

The deal will need to be approved by the Australian Competition and Consumer Commission (ACCC) and potentially the New Zealand Overseas Investment Offices.

The Pharmacy Guild has urged the (ACCC) to “consider and address” its concerns before approving the proposed merger.

If it’s granted ACCC approval, shareholders of the two companies will vote before the merger can be finalised.

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