ACCC approves Chemist Warehouse merger with Sigma Healthcare

ABC NEWS (Australia)

Australia's competition regulator has approved the merger between Chemist Warehouse and Sigma Healthcare, creating an $8.8 billion pharmaceutical giant.

Transcript

00:00This is a major deal in Australia's pharmacy industry, this $8.8 billion merger between

00:08Chemist Warehouse and Sigma is going to result in them having 1,000 stores across the country

00:15as well as 16 distribution centres in Australia and New Zealand.

00:20Now Sigma operates a lot of brands that we would know, Amcal, Chemist is one of those

00:25brands, Discount Drugstores, a number of other brands and the agreement is that they'll

00:31be able to continue operating under those brands but under this same one company now.

00:37Now in June the ACCC had expressed concerns about this merger, it had said that this is

00:43a major structural change to the pharmacy sector in Australia and that it had fears

00:49that this could lessen competition in Australia's market but today it's come out and it said

00:55that it doesn't think that that will happen.

00:58It's slapped a number of restrictions on this merger so one of those restrictions is that

01:02if a company does want to or a franchisee wants to switch they would be able to do that.

01:09If a franchisee does decide to switch their data won't be held by the company anymore,

01:14obviously a lot of these pharmacies are family run businesses and their data is important

01:18to them and it's also important to remember that Sigma is actually a distributor of pharmaceutical

01:24products so it also has put restrictions on to make sure that Sigma doesn't do wrong

01:30by the franchisees in terms of being able to lock them out from getting better deals

01:35on supplies of pharmaceutical products.

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