Sigma Healthcare Shares Surge as Merger with Chemist Warehouse Nears Approval

Highlights:

• Sigma Healthcare Ltd (ASX: SIG) shares have jumped 25% as excitement grows around its potential $700 million merger with Chemist Warehouse.
• ACCC reviewing the merger after Sigma addressed competition concerns, including enforceable undertakings for independent pharmacies.
• Final decision expected on November 7, with Sigma shares up 77% in the past 12 months, reflecting strong investor confidence.

Sigma Healthcare Ltd (ASX: SIG) has seen its shares rise significantly in recent days, driven by growing optimism surrounding its proposed merger with Chemist Warehouse. As of now, Sigma's shares are priced at $1.78, reflecting a 25% rise since the close of last week.

Merger Boosts Investor Confidence

The proposed $700 million merger between Sigma and Chemist Warehouse has investors eagerly buying shares. The deal involves Sigma purchasing all Chemist Warehouse shares, giving the latter over 85% ownership of the newly listed entity. This backdoor listing approach is poised to reshape Australia's pharmacy landscape, bringing about significant market changes.

ACCC Concerns Addressed

The Australian Competition and Consumer Commission (ACCC) is conducting a review of the merger, citing concerns over diminished competition, particularly for independent pharmacies that rely on Sigma for supplies. To address these concerns, Sigma has committed to enforceable undertakings, including ensuring franchisees can exit without penalties and maintaining its role in the Community Service Obligation for five years.

Awaiting ACCC's Final Decision

The ACCC is now seeking public feedback on Sigma's proposed commitments. While the regulator has not confirmed its acceptance, the market's positive response indicates strong expectations for the merger's approval. The ACCC's final decision is anticipated on November 7.

With Sigma shares up 77% over the past 12 months, investors remain optimistic that the merger will gain approval and reshape the competitive landscape.

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