How does this massive $8.8 billion Chemist Warehouse merger affect you?
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In a move that's set to shake up the Australian retail landscape, Chemist Warehouse has announced it is merging with its supplier, Sigma Healthcare.
This mega-merger, valued at an estimated $8.8 billion, will create an ASX-listed retail giant expected to be among Australia's top 100 companies.
But what does this mean for the everyday Aussie customer? Let's delve into the details.
According to reports, Sigma Healthcare will acquire Chemist Warehouse in exchange for company shares. This move will have Sigma handing Chemist Warehouse $700 million in cash, but the privately held pharmacy group will still own 85.78 per cent of the merged company.
This deal is a backdoor listing for Chemist Warehouse Group, a 600-store chain founded by the Gance and Verrocchi families in Melbourne around 50 years ago.
With an estimated market capitalisation of $8.8 billion, the combined company will be a significant player on the ASX200.
According to Chemist Warehouse Group chairman Jack Gance, this merger is a strategic move that combines the retailing and marketing prowess of Chemist Warehouse with Sigma's distribution infrastructure and logistics capabilities.
Sigma chairman Michael Sammells has described the merger as a 'step-change' for his company, unlocking many growth opportunities. But what does this mean for the customers who frequent Chemist Warehouse's stores?
According to Sammells, the merger will benefit customers by offering more brand choices, products and services, and expanded marketing capabilities.
This could mean a broader range of products on the shelves and potentially more competitive prices due to increased buying power.
Meanwhile, local brands and small and medium-sized businesses are also predicted to benefit from this merger.
Anthony McDonough, Co-Founder of Unlabelled, a body wash brand and social enterprise that donates its earnings to youth mental health charities, said that the merger ‘raises the possibility’ of the company having closer ties with Amcal and Discount Drug Stores. Both of which are owned by Sigma Healthcare.
McDonough stated that having access to Amcal and Discount Drug Stores would be ‘great for expanding Unlabelled’s presence in pharmacy within Australia, giving more people the opportunity to buy Unlabelled and support our cause’.
He added that this merger translates into the expansion of the domestic retail network—with further potential for global market expansion—offering ‘game-changing’ opportunities for many local brands.
However, this isn’t the first time Chemist Warehouse has made plans to expand its network.
In August this year, the founders of veteran cancer care service Icon Group and leading pharmacy chain Chemist Warehouse announced they would be joining forces to expand the pharmacy chain to serve hospitals across Australia.
This new joint venture, aptly called Chemist Warehouse Hospital Pharmacy, also includes the legendary Chemist Warehouse founders Jack Gance and Mario Verrocchi, as together they aim to break into the in-hospital chemist market.
A Chemist Warehouse spokesperson also indicated that the venture would not only open up more employment for pharmacists and pharmacy assistants but enhance their ‘highly sought-after’ trainee program by introducing it to the hospital pharmacy environment.
More details about this story can be read here.
What are your thoughts on this merger, members? Do you believe it would lead to better deals and more choices for consumers, or are you concerned about the potential impact on competition? Let us know in the comments below.
This mega-merger, valued at an estimated $8.8 billion, will create an ASX-listed retail giant expected to be among Australia's top 100 companies.
But what does this mean for the everyday Aussie customer? Let's delve into the details.
According to reports, Sigma Healthcare will acquire Chemist Warehouse in exchange for company shares. This move will have Sigma handing Chemist Warehouse $700 million in cash, but the privately held pharmacy group will still own 85.78 per cent of the merged company.
This deal is a backdoor listing for Chemist Warehouse Group, a 600-store chain founded by the Gance and Verrocchi families in Melbourne around 50 years ago.
Chemist Warehouse is merging with its supplier Sigma Healthcare to create an ASX-listed company worth $8.8 billion. Credit: Shutterstock
With an estimated market capitalisation of $8.8 billion, the combined company will be a significant player on the ASX200.
According to Chemist Warehouse Group chairman Jack Gance, this merger is a strategic move that combines the retailing and marketing prowess of Chemist Warehouse with Sigma's distribution infrastructure and logistics capabilities.
Sigma chairman Michael Sammells has described the merger as a 'step-change' for his company, unlocking many growth opportunities. But what does this mean for the customers who frequent Chemist Warehouse's stores?
According to Sammells, the merger will benefit customers by offering more brand choices, products and services, and expanded marketing capabilities.
This could mean a broader range of products on the shelves and potentially more competitive prices due to increased buying power.
Meanwhile, local brands and small and medium-sized businesses are also predicted to benefit from this merger.
Anthony McDonough, Co-Founder of Unlabelled, a body wash brand and social enterprise that donates its earnings to youth mental health charities, said that the merger ‘raises the possibility’ of the company having closer ties with Amcal and Discount Drug Stores. Both of which are owned by Sigma Healthcare.
McDonough stated that having access to Amcal and Discount Drug Stores would be ‘great for expanding Unlabelled’s presence in pharmacy within Australia, giving more people the opportunity to buy Unlabelled and support our cause’.
He added that this merger translates into the expansion of the domestic retail network—with further potential for global market expansion—offering ‘game-changing’ opportunities for many local brands.
However, this isn’t the first time Chemist Warehouse has made plans to expand its network.
In August this year, the founders of veteran cancer care service Icon Group and leading pharmacy chain Chemist Warehouse announced they would be joining forces to expand the pharmacy chain to serve hospitals across Australia.
This new joint venture, aptly called Chemist Warehouse Hospital Pharmacy, also includes the legendary Chemist Warehouse founders Jack Gance and Mario Verrocchi, as together they aim to break into the in-hospital chemist market.
A Chemist Warehouse spokesperson also indicated that the venture would not only open up more employment for pharmacists and pharmacy assistants but enhance their ‘highly sought-after’ trainee program by introducing it to the hospital pharmacy environment.
More details about this story can be read here.
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