Chemist Warehouse Triumphs: Sigma Healthcare Merger Approved

The Australian competition regulator has approved Chemist Warehouse's reverse takeover of Sigma Healthcare, forming an A$8.8 billion entity. Despite opposition from rivals and industry groups, the deal, which faced ACCC scrutiny over competition concerns, will consolidate their stakes in the pharmaceutical retail sector.

The Australian regulator has given the green light to Chemist Warehouse's acquisition of Sigma Healthcare, marking the creation of an A$8.8 billion pharmaceutical entity. This approval comes after a year-long review and has significantly impacted Sigma's stock performance, with a record surge of nearly 40%.

Initially announced a year ago, the merger involved Chemist Warehouse buying Sigma with stocks and a substantial cash payment. Despite concerns about the potential monopolistic effects, concessions allowed the deal to proceed. This merger unites around 1,000 Sigma-affiliated pharmacies with 600 Chemist Warehouse stores.

The ACCC stated that the merger is unlikely to reduce competition due to existing market dynamics. However, the deal remains under scrutiny from competitors like Ebos Australia and the Pharmacy Guild, who warn about market consolidation's impact on healthcare services.

(With inputs from agencies.)