Discount pharmacy retailer Chemist Warehouse will be allowed to merge with Sigma Healthcare to create an $8.8 billion pharmaceutical giant after being approved by Australia’s competition regulator.
In a statement, the ACCC said the deal would not reduce competition in the pharmaceutical sector.
“The ACCC found that, with the undertaking, the proposed merger is unlikely to substantially lessen competition,” ACCC chair Gina Cass-Gottlieb said.
“There is and will continue to be effective competition at all levels of the pharmacy supply chain, capable of constraining a combined Sigma Chemist Warehouse.
“The ACCC’s analysis found that the proposed merger is unlikely to substantially lessen competition nationally or locally because other pharmacies and non-pharmacy retailers will continue to compete to the same extent they compete now.”
The ACCC said it would not oppose the decision after accepting a court-enforceable undertaking from Sigma, that would see a series of obligations placed on the merged company.
In June, the ACCC expressed concerns that the deal could significantly reduce competition and result in higher prices.
Chemist Warehouse and Sigma Healthcare — which owns the Amcal, Guardian, PharmaSave and Discount Drug Store pharmacy brands — entered into a merger deal in December.
The merger will see the company have more than 1,000 retail stores and 16 distribution centres in Australia and New Zealand.
The deal still needs to be approved by Sigma Healthcare’s shareholders before being finalised.
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