Sigma Healthcare sets completion date for Chemist Warehouse mega-merger

Sigma Healthcare and Chemist Warehouse have agreed to extend their mega-merger deadline to the end of March.

Sigma told investors on Wednesday that key documentations required for voting on the tie-up — which will catapult the privately held pharmacy franchisor Chemist Warehouse on to the Australian Securities Exchange — would be released by the end of the year.

Implementation is expected to occur in February.

Both parties are now awaiting the approval of certain resolutions in connection with the transaction by Sigma shareholders, the approval of the scheme by CWG shareholders and the approval of the court.

It comes after the consumer watchdog last month decided it would not oppose the deal, rejecting fears it would reduce competition in the lucrative retail space.

The Australian Competition and Consumer Commission had initially feared the tie-up would reduce competition in pharmacy retailing by removing the price pressure Chemist Warehouse and Sigma stores impose on each other and lead to higher prices for customers.

Prior to that decision, Sigma offered concessions to get the deal over the line.

It offered a court-enforceable undertaking that would allow franchisees who joined the pharmacy retailer’s network before January 1 to terminate their agreements without penalties, for a period of three years.

It would also place restrictions on the collection, use and disclosure of confidential data from Sigma wholesale customers and franchisees, as well as remain a participating pharmaceutical wholesaler under the Commonwealth Government’s Community Service Obligation arrangements for at least five years.

ASX-listed Sigma is a medicine and over-the-counter wholesaler, as well as a pharmacy franchisor under the Amcal+ and Discount Drug Store banners.

Chemist Warehouse is a pharmacy franchisor that distributes to its own stores under the MyChemist, UltraBeauty, My Beauty Spot and the Optometrist Warehouse brands.