Sigma Healthcare announced on February 4 that shares issued under the merged group are expected to commence trading on the Australian Securities Exchange (ASX) a week later on February 13.
Under the arrangement, Chemist Warehouse shareholders will hold approximately 85.75 per cent of the merged group and Sigma shareholders will hold approximately 14.25 per cent.
Sigma Healthcare is a wholesaler and distributor of healthcare products to pharmacies.
The company, which is already listed on the ASX, also runs the pharmacy chains Amcal and Discount Drug Stores across Australia.
Chemist Warehouse, on the other hand, is a privately-owned pharmacy chain in Australia popular for selling products at steep discounts.
The merger comes following approval from the Australian Federal Court on February 3. Prior to that, 100 per cent of Chemist Warehouse’s shareholders have also voted in favour of the merger on January 29.
Co-founders of Chemist Warehouse Jack Gance, Damien Gance, and Mario Verrocchi have been elected as directors at Sigma Healthcare. Danielle Di Pilla, veteran pharmacist at Chemist Warehouse, was also elected to the Sigma board.
Vikesh Ramsunder, currently the CEO and managing director of Sigma Healthcare, will continue his role in the merged group.
The merger has been the talk of the town as it will lead to the creation of a “full-service” company running wholesaler, distributor, and retail pharmacy franchiser businesses.
In particular, Sigma Healthcare pointed out that Chemist Warehouse could bring “strong pharmacy franchise and marketing expertise” to help elevate its retail strategy.
There are also opportunities for growth both within Australia and internationally.
“Whilst this model already exists in Australia and internationally, it has the potential to accelerate our strategic direction by bringing together two complementary businesses with complementary core strengths and expertise to enhance our service offering to customers,” said Michael Sammells, chairman of the board of Sigma Healthcare.
“Sigma has world-class distribution infrastructure and capability that is delivering best in class service to pharmacies across Australia every day.
“Chemist Warehouse has unparalleled pharmacy franchise and marketing know-how and expertise which will also help elevate our support for our Amcal and Discount Drug Store franchisees,” he added.
Chemist Warehouse’s sales performance
Chemist Warehouse’s sales for the first half of FY25, recorded as between July and December 2024, was AUD5.15bn (US$3.22bn).
This was 13 per cent higher from AUD4.56bn (US$2.85bn) recorded in the year before.
Sales of Chemist Warehouse was revealed as part of Sigma Healthcare’s trading update statement on January 28.
Majority of its sales came from the Australian market, which contributed AUD4.51bn (US$2.82bn), while the international markets contributed AUD648.2m (US$405.5m).
Aside from Australia, Chemist Warehouse is also available in markets such as New Zealand, China, and Dubai.
It has a total of 658 outlets as of December 31.
“Chemist Warehouse Group (CWG) has delivered a record result for 1H FY25 with double digit like-for-like retail network sales growth, aided by a strong trading performance in December.
“We have executed well on the commitments we made in September to deliver sustained growth through new franchise store openings and international expansion while implementing new supply agreements to drive efficiencies. Earnings before interest and taxes (EBIT) increased by 35 per cent and margins expanded by 400 basis points,” said Chemist Warehouse CEO Mario Verrocchi.
He added that the company opened 19 new stores during the period, with two in Dubai - which he said was “a new geography with attractive opportunities.”
