Australia's competition watchdog has just given the green light to a major merger: Chemist Warehouse and Sigma Healthcare, two big players in the pharmacy world, are set to join forces in an $8.8 billion deal. Chemist Warehouse, known for its discount prices, will merge with Sigma, one of Australia’s largest pharmacy wholesalers and a franchisor of Amcal and Discount Drug Store chains.
Once the merger is complete, the new combined company will have a huge presence, with over 1,000 retail stores and 16 distribution centers across Australia and New Zealand. This move has been carefully reviewed by the Australian Competition and Consumer Commission (ACCC), which, despite raising concerns earlier this year, has now decided the merger won’t drastically reduce competition in the sector.
Gina Cass-Gottlieb, the ACCC chair, reassured the public in a statement, saying, “There is and will continue to be effective competition at all levels of the pharmacy supply chain,” which will keep the new mega-company in check. Even though this merger represents a major change in the structure of the industry—bringing together the largest pharmacy chain and a major supplier to independent pharmacies—the ACCC’s analysis suggests other pharmacies and retailers will still compete effectively.
The ACCC’s approval came with some conditions: they’ve accepted a legally binding undertaking from Sigma, which helped alleviate the initial competition concerns flagged earlier this year. So, with ACCC’s nod, it’s full speed ahead for Chemist Warehouse and Sigma on their path to becoming a pharmaceutical powerhouse in the region.
Commentaires