Regulator flags competition woes over Sigma Healthcare's $5.9 bln merger with Chemist Warehouse (updated)
13/06/2024 01:21
(Adds further details from paragraph 2 onwards)
June 13 (Reuters) - Australia's competition regulator
highlighted on Thursday potential competition concerns over
Sigma Healthcare's SIG.AX proposed merger with Chemist
Warehouse Group to form an A$8.8 billion ($5.86 billion) entity.
The Australian Competition and Consumer Commission (ACCC)
identified a range of preliminary competition concerns on the
grounds that the proposed integration of the merged firm across
the wholesale and retail level would limit competition in the
country's pharmacy sector.
In December last year, Sigma said it would
merge
with privately owned pharmacy giant Chemist Warehouse
Group, which will own 85.8% of the merged entity that will
supply 1,000 Sigma-aligned pharmacies and own 600 Chemist
Warehouse outlets.
"In particular, we are focused on how the newly merged
company may have the ability and incentive to favour Chemist
Warehouse stores or worsen terms to non-Chemist Warehouse banner
stores, raising their costs and rendering them less
competitive," ACCC Commissioner Stephen Ridgeway said in a
statement.
($1 = 1.5013 Australian dollars)
(Reporting by Roushni Nair in Bengaluru; Editing by Alan
Barona)
((Roushni.Nair@thomsonreuters.com;))