Regulator says proposed merger unlikely to lessen competition
Sigma shares at record high

Nov 7 Reuters The Australian competition regulator, on Thursday, cleared privately owned pharmacy chain Chemist Warehouse39;s reverse takeover of Sigma Healthcare, paving the way to create an A8.8 billion 5.78 billion entity after a yearlong wait.

Sigma39;s stock surged almost 40, the most on the Australian benchmark index, to hit a record high.

Chemist Warehouse had said roughly a year back it would buy Sigma for stock and A700 million in cash, giving it a roughly 85 stake in the merged entity and a backdoor way to list on the stock exchange at a time when global capital markets were in the doldrums.

But the deal creating a company supplying around 1,000 Sigmaaligned pharmacies and owning 600 Chemist Warehouse outlets has been under the Australian Competition and Consumer Commission39;s ACCC scrutiny and was cleared after the companies made concessions to alleviate competition concerns.

The ACCC said the proposed deal was unlikely to substantially lessen competition subject to Sigma allowing franchises to opt out of their agreements without penalties to make it easier for a pharmacy to switch networks.

The ACCC39;s analysis found that the proposed merger is unlikely to substantially lessen competition nationally or locally because other pharmacies and nonpharmacy retailers will continue to compete to the same extent they compete now, Chair Gina CassGottlieb said….