Chemist Warehouse’s $8.8b merger could stifle competition, shut stores: ACCC

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Australia’s competition watchdog has raised concerns that Chemist Warehouse’s planned merger with Sigma Healthcare into an $8.8 billion titan will hurt rivals in the pharmacy sector.

Australia’s competition watchdog has raised concerns that Chemist Warehouse’s planned merger with Sigma Healthcare into an $8.8 billion pharmacy titan will lessen competition on the retail and wholesale levels, hinder rivals from growing or expanding, and result in the closure of chemists.

in early December that Chemist Warehouse was planning to sell its shares on the Australian stock exchange through a reverse listing via Sigma, a pharmaceutical wholesaler and distributor, in a merger that would create an industry giant. “Following the acquisition, the merged company may be able to use insights from data obtained to target pharmacies that rival Chemist Warehouse or pre-empt and undermine them,” Ridgeway said.There are around 600 Chemist Warehouse outlets in Australia that are not directly owned by the head company, but pharmacist-owned franchise stores supplied by the brand. Sigma supports 340 pharmacies under its Amcal and Discount Drug Store brands.

 

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