Australia's Sigma offers to address regulatory concerns on $6 bln merger with Chemist Warehouse (updated)

Sigma Healthcare

01/10/2024 01:07

(Adds context and details throughout)
       Oct 1 (Reuters) - Australia's antitrust regulator said
on Tuesday Sigma Healthcare  SIG.AX  had offered
court-enforceable undertaking to address competition concerns
about its proposed merger with Chemist Warehouse to form an
A$8.8 billion ($6.09 billion) company.
    The Australian Competition and Consumer Commission (ACCC),
in its preliminary findings published in June, said the deal
could leave pharmacies outside the merged group facing rising
costs, which would lead them to be less competitive.
    The regulator had said it was worried that the merged group
would have access to the commercially sensitive data of Sigma's
existing pharmacy customers.
    Under the proposed undertaking, Sigma would restrict the
collection and use of confidential data from its wholesale
customers and franchisees for three years, and also allow
franchisees to terminate their agreements, the competition
regulator said.
    The ACCC said it was seeking feedback from stakeholders on
whether the draft undertaking offered by Sigma might be capable
of addressing the competition concerns.
    Chemist Warehouse is a privately owned pharmacy and retail
chain in Australia known for cheap prices and large stores,
while Sigma is a wholesaler and distributor of prescription
medicines and other products.
    The proposed deal, announced in December, would see Sigma
acquiring Chemist Warehouse in exchange for a stake in the
company and A$700 million in cash, allowing Chemist Warehouse to
be effectively backdoor listed through Sigma.
    Acknowledging the ACCC's decision to start a consultation
process, Sigma said it would work co-operatively with the
regulator.
    To facilitate consultation, the proposed date for the ACCC's
decision on the merger has been extended to Nov. 7 from Oct. 24.
    
       
($1 = 1.4455 Australian dollars)

 (Reporting by Himanshi Akhand in Bengaluru; Editing by
Subhranshu Sahu)
 ((Himanshi.Akhand@thomsonreuters.com;))