Sigma Healthcare (ASX:SIG) has announced a significant step forward in its proposed merger with Chemist Warehouse Group (CWG), following the Australian Competition and Consumer Commission’s decision not to oppose the deal. The approval comes with an enforceable commitment from Sigma’s court, ensuring competitive practices are maintained.
The merger, which involves Sigma acquiring CWG in exchange for shares and $700 million in cash, represents a reverse takeover in which Chemist Warehouse shareholders will hold an 85.75% stake in the entity resulting from the merger. Sigma CEO Vikesh Ramsunder welcomed the ACCC’s decision, calling it a “milestone” and highlighting the potential to form a leading ASX-listed healthcare company.
The ACCC’s investigation found that the merger is unlikely to substantially reduce competition due to the presence of other major wholesalers such as API and EBOS. President Gina Cass-Gottlieb noted that alternative wholesalers and the ability of pharmacies to change suppliers played a key role in the decision.
Sigma is committed to ensuring that pharmacies with long-term contracts can exit without excessive costs and that their data is protected. The merged entity also commits to meeting the Commonwealth Government’s community service obligations for five years, ensuring the continued supply of Pharmaceutical Benefits Scheme (PBS) medicines nationwide.
The shares are trading up 32.65% at $2.58.