Australia’s Sigma offers to address regulatory concerns over $6 billion merger with Chemist Warehouse

(Reuters) – Australia’s antitrust regulator said on Tuesday Sigma Healthcare had offered a court-enforceable undertaking to address competition concerns over its proposed merger with Chemist Warehouse to form an A$8.8 billion company (Reuters). 6.09 billion dollars).

The Australian Competition and Consumer Commission (ACCC), in its preliminary findings released in June, said the deal could leave pharmacies outside the merged group facing rising costs, making them less competitive.

The regulator had expressed concern that the merged group would have access to the commercially sensitive data of Sigma’s existing pharmacy clients.

Under the proposed commitment, Sigma would restrict the collection and use of confidential data from its wholesale and franchise customers for three years, and also allow franchisees to terminate their agreements, the competition regulator said.

The ACCC said it was seeking views from stakeholders on whether Sigma’s proposed draft engagement might be able to address competition concerns.

Chemist Warehouse is a privately owned pharmacy and retail chain in Australia known for its cheap prices and large stores, while Sigma is a wholesaler and distributor of prescription drugs and other products.

The proposed deal, announced in December, would see Sigma acquire Chemist Warehouse in exchange for a stake in the company and A$700 million in cash, allowing Chemist Warehouse to effectively be listed through the backdoor through Sigma.

Acknowledging the ACCC’s decision to launch a consultation process, Sigma said it would work cooperatively with the regulator.

To facilitate consultation, the proposed date for the ACCC’s decision on the merger has been extended from 24 October to 7 November.

($1 = 1.4455 Australian dollars)

(Reporting by Himanshi Akhand in Bangalore; Editing by Subhranshu Sahu)