Sigma Healthcare will pay $700 million in cash and enough shares such that shareholders of the privately held pharmacy chain own 85.75 per cent of the merged group, Sigma announced on Monday.
The deal could be considered a backdoor listing for Chemist Warehouse Group, a 600-store chain founded by the Gance and Verrocchi families in Melbourne around 50 years ago.
With an estimated $8.8 billion market capitalisation, the combined company would be among Australia's 100 biggest and easily eligible for the ASX200.
Sigma chairman Michael Sammells called the merger a step-change for his company, unlocking efficiencies, synergies and growth opportunities.
"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," he said.
Chemist Warehouse Group chairman Jack Gance said the deal would combine Chemist Warehouse's retailing and marketing capabilities and Sigma's state-of-the-art distribution infrastructure and logistics capabilities.
CWG founders Mario Verrocchi, Mr Gance and Sam Gance have agreed to an escrow arrangement for their roughly 49 per cent combined stake in Chemist Warehouse Group.
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