Sigma's $5.9 bln merger with Australia's Chemist Warehouse raises regulatory concerns
Updates share price in paragraph 4, adds analyst comment in paragraphs 11-12
By Scott Murdoch
SYDNEY, June 13 (Reuters) -Australia's competition regulator on Thursday flagged major concerns with Sigma Healthcare's SIG.AX proposed merger with retailer Chemist Warehouse Group to form a A$8.8 billion ($5.9 billion) company.
The Australian Competition and Consumer Commission (ACCC) said in a statement the proposed integration across the wholesale and retail level would limit competition in a number of markets.
Chemist Warehouse is a privately-owned pharmacy and retail chain in Australia known for cheap prices, large stores and major advertising campaigns, while Sigma is a wholesaler and distributor of prescription medicines and other products.
Sigma shares were down 4.56% in afternoon trading after having dropped nearly 11% earlier on Thursday. A final ACCC decision is due on Sept 5.
Sigma said it would cooperate closely with the ACCC as part of the regulator's competition review. It added the ACCC's statement of issues was not unexpected for a complex transaction.
Chemist Warehouse said it would fully cooperate with the ACCC and would ensure the regulator had all of the information required to complete its assessment.
The proposed deal, announced in December, has Sigma acquiring Chemist Warehouse in exchange for a stake in the company and A$700 million in cash, allowing Chemist Warehouse to be effectively backdoor listed through Sigma.
Chemist Warehouse will own 85.8% of the merged entity that will supply 1,000 Sigma-aligned pharmacies and own 600 Chemist Warehouse outlets.
The regulator said the deal could leave pharmacies outside of the merged group facing rising costs, which would lead them to be less competitive.
"The key issue is whether or not the proposed acquisition weakens competition in the supply of pharmaceutical products," ACCC Commissioner Stephen Ridgeway said.
Shaw and Partners senior analyst Philip Pepe said the ACCC's statement, combined with its decision to block some major deals like Qantas Airways' QAN.AX proposed purchase of Alliance Aviation Services AQZ.AX, increased the risks of the Sigma deal not going ahead.
"(This) leads us to continue to believe the proposed merger is unlikely to receive ACCC approval in its current form," said Pepe, who downgraded Sigma to a "sell" rating in late March.
The ACCC said it was worried the merged group would have access to Sigma's existing pharmacy customers' commercially sensitive data.
"Following the acquisition, the merged company may be able to use insights from data obtained to target pharmacies that rival Chemist Warehouse or pre-empt and undermine them," Ridgeway said.
($1 = 1.5013 Australian dollars)
Reporting by Scott Murdoch in Sydney and Roushni Nair in Bengaluru; Editing by Alan Barona and Jamie Freed
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
