By Stuart Condie
SYDNEY–Australian drug supplier Sigma Healthcare agreed to merge with privately owned pharmacy operator CW Group, creating a listed company worth more than 8.8 billion Australian dollars (US$5.79 billion).
Sigma on Monday said it would pay A$700 million in cash and issue sufficient new shares for CW Group, the operator of Australia’s prominent Chemist Warehouse pharmacy chain, to own 86% of the combined company. Shareholders of Sigma, which has a market capitalization of A$810.4 million, would own the remainder.
Sigma plans to raise A$400 million in equity through a fully underwritten entitlement offer.
The merger will create a combined healthcare wholesaler, distributor and retail pharmacy franchiser, Sigma said. The company would be one of the 50 largest companies on Australian’s benchmark S&P/ASX 200 index.
The companies expect to realize about A$60 million in annual cost savings within four years of the merger. CW Group operates about 600 stores, mostly under the Chemist Warehouse brand.
Write to Stuart Condie at [email protected]
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