Optometrist Warehouse managing director Mr Peter Larsen has confirmed it’s “business as usual” for the new optometry network after major news that Chemist Warehouse plans to merge with Sigma Healthcare to create Australia’s largest pharmacy group potentially worth more than $8.8 billion.
Announced on Monday 11 December, Chemist Warehouse’s parent company CW Group (CWG) Holdings said the “transformational merger” with Sigma would create a leading healthcare wholesaler, distributor and retail pharmacy franchisor. The ultimate aim is to combine Sigma’s distribution infrastructure with CWG’s retailing know-how.
CWG is described as a leading Australian retail pharmacy franchisor, with around 600 stores, mainly operating under the Chemist Warehouse banner. The company is also part-owner of a number of brands it stocks.
Chemist Warehouse also made headlines earlier in 2023 when it announced plans to “disrupt” the optometry market by launching Optometrist Warehouse in the Melbourne suburb of Malvern in February. It has since opened a second store in Campbelltown in Sydney, with plans for a “mass network rollout”.
Asked about what the merger would mean for Optometrist Warehouse, Larsen told Insight: “At this stage it is business as normal. Clearly, we are very excited to be part of an organisation that has so much scale and reach in health care.”
Meanwhile, Sigma is a major Australian pharmaceutical wholesaler and pharmacy franchisor, with shopfronts such as Amcal, Discount Drug Stores, Guardian and PharmaSave. According to the ABC, it also operates nine distribution centres across Australia, and creates its own products that it sells through its own stores and supplies to other pharmacies.
As part of the deal, CWG shareholders will receive $700 million in cash, as well as Sigma shares that will see CWG shareholders owning 85.75% of the merged company and Sigma shareholders the remaining 14.25%.
The proposed merger is still subject to approval by the Australian Competition and Consumer Commission (ACCC) and the New Zealand Overseas Investment Office.
If given the green light, the merged company would be valued at around $8.8 billion, making it one of Australia’s largest ASX listed companies.
“The proposed merger is a step-change event for Sigma,” Sigma chairman Mr Michael Sammells said.
“With Sigma having had a commercial relationship with CWG and its founders spanning more than 40 years, we are excited by the efficiencies, synergies and growth opportunities that we anticipate being unlocked through the merger of the two complementary businesses. The combined group will have extensive capabilities and expertise to benefit franchisees and customers, including through more brand choice, products and services and expanded marketing capabilities.”
Meanwhile, CWG chairman Mr Jack Gance said the combination of CWG’s retailing and marketing capabilities and Sigma’s state-of-the-art distribution infrastructure and logistics capabilities presented a unique opportunity.
“We look forward to building the next chapter of CWG’s success for the benefit of our customers, staff, franchisees and shareholders,” he said.
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