Juggernaut Aussie conglomerate Wesfarmers has announced it will acquire Australian Pharmaceutical Industries Limited (API), the parent company of well-known household brands Priceline and Soul Pattinson Chemists.
The acquisition will grow Wesfarmers’ already impressive list of brands including Bunnings, Kmart and Officeworks.
This morning Wesfarmers announced it has entered into a Scheme Implementation Deed in which it will acquire 100 per cent of API’s shares at $1.55 a share.
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Wesfarmers already owned a 19.3 per cent stake in API, which also owns Clear Skincare, Pharmacist Advice and catalogue program Pharmacy BestBuys.
Priceline and Priceline Pharmacy is one of Australia’s biggest pharmaceutical and beauty retailers, boasting more than 420 stores nationwide.
Wesfarmers Managing Director Rob Scott said the takeover of API presented an “attractive” opportunity to enter the health, wellbeing and beauty sector.
“Wesfarmers continues to see opportunities to invest in and strengthen the competitive position of API and its community pharmacy partners by expanding ranges, improving supply chain capabilities and enhancing the online experience for customers,” Mr Scott said.
Mr Scott said Wesfarmers supports API’s current business model and there are no plans to change branding.
“In addition to our discussions with API management, we have engaged with industry stakeholders during due diligence. As we have previously stated, Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules,” Mr Scott said.
“Wesfarmers recognises the importance of strong relationships with our trading partners and we look forward to working closely with API’s pharmacy partners, suppliers and other industry stakeholders.”
The API board has unanimously recommended that API shareholders vote in favour of the scheme, which still needs to be approved by the Australian Competition and Consumer Commission (ACCC).
Pending regulatory approval, it’s forecast the acquisition will take place in early 2022.
The Scheme is not subject to due diligence or financing.