Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Chemist Warehouse, Sigma Healthcare merge in $5bn deal

Published Dec 10, 2023 08:33PM ET Updated Dec 10, 2023 08:44PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
AXJO
+0.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

MELBOURNE - Chemist Warehouse Group (CWG) and Sigma Healthcare have announced a transformative merger agreement that will result in the creation of an $8.8 billion entity, marking one of Australia's most significant healthcare sector consolidations. The deal, which includes a substantial $700 million cash component, will position the combined organization within the top 100 Australian companies and ensure its inclusion in the ASX200 index.

The merger, set to redefine the pharmacy landscape, will see CWG founders Jack Gance and Mario Verrocchi assume board positions while retaining majority ownership in the new public entity. Vikesh Ramsunder is slated to continue his leadership role as managing director. The founders' shares are subject to escrow conditions, with non-escrowed shareholders holding nearly 37% of the company.

Under the terms of the agreement, Chemist Warehouse will secure an 85.75% stake in Sigma Healthcare through a mix of cash and share issuance of about $5bn. This move effectively enables a backdoor listing for CWG's expansive pharmacy network, which boasts around 600 stores primarily located in Melbourne where the business was founded over 50 years ago.

The strategic alignment is poised to bring about significant benefits for both entities. Michael Sammells from Sigma anticipates improved operational efficiencies and expanded growth opportunities. Meanwhile, CWG chairman Jack Gance envisions enhanced retail prowess and marketing capabilities along with access to Sigma's advanced distribution network.

To support the merger and its associated activities, a capital raise of $400 million is being pursued for working capital purposes. The transaction also anticipates generating annual cost synergies estimated at $60 million.

The deal's completion remains subject to approval from the Australian Competition and Consumer Commission (ACCC), which is currently reviewing CWG's proposed acquisition stake. As both companies await regulatory consent, this landmark merger stands to reshape the Australian pharmaceutical retail sector significantly.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Chemist Warehouse, Sigma Healthcare merge in $5bn deal
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email