Sigma Healthcare Limited

On 7 November 2024, the ACCC announced that it had accepted a court-enforceable undertaking given by Sigma Healthcare Limited (Sigma) pursuant to s87B of the Competition and Consumer Act 2010 (Cth) (the Undertaking) in connection with Sigma and CW Group Holdings Limited (Chemist Warehouse) entering into a Merger Implementation Agreement, pursuant to which Sigma will acquire all the shares in Chemist Warehouse by way of a scheme of arrangement in exchange for a combination of Sigma shares and $700 million cash consideration (the Proposed Acquisition).

The ACCC was concerned that, in the absence of the Undertaking, the Proposed Acquisition may have the effect, or be likely to have the effect of, substantially lessening competition in pharmacy retailing in Australia.

Objective of the Undertaking

The objective of the Undertaking is to address the ACCC’s competition concerns that would otherwise arise as a result of the Proposed Acquisition. The Undertaking aims to achieve this by requiring Sigma to commit:

• to ensure that Sigma franchisees and wholesale customers can readily terminate their agreements with Sigma, subject to specific exclusions  
• to implement data protection measures and to delete confidential information when Sigma franchisees and wholesale customers elect to terminate their contracts with Sigma
• to remain a participating pharmaceutical wholesaler in the Commonwealth Government’s Community Service Obligation arrangements
• to provide for the effective oversight of Sigma’s compliance with the Undertaking.