Chemist Warehouse’s multi-billion dollar merger with Sigma Healthcare remains on track to be completed in February after controversial related-party transactions between the chemist giant’s co-founders and their relatives were backed by an independent expert.
The merger has seen concerns raised about the possible impact of two such large pharmacy groups coming together and not compromising competition, with the deal giving Chemist Warehouse’s co-founders Jack and Sam Gance and Mario Verrocchi control over many of Australia's pharmacies.
However, a report into the merger has been released with an independent expert finding that the arrangements were “fair and reasonable”, according to the Australian Financial Review.
The review was undertaken by consulting firm Grant Thornton and was one of the final hurdles to the deal, which will next go to a shareholder vote on January 29.
The report also found there was not a significant difference between Chemist Warehouse’s franchise fees, which were 0.3 per cent higher than other pharmacies in the Sigma group, with previous concerns raised that Chemist Warehouse was paid significantly higher franchise fees.
“This provides us with comfort that the difference in the aggregate fees between the pharmacies is largely immaterial and within the range expected in light of the variability in aggregate fees observable across pharmacies,” the report stated.