Wesfarmers will acquire 100 per cent of Priceline Pharmacy-owner Australian Pharmaceutical Industries, signaling the retail conglomerate’s entrance into the wellness space.
API had been locked in a tug of war between Wesfarmers and fellow pharmaceuticals firm Sigma, which made a bid at keeping Wesfarmers out of the health space, but ultimately stepped out of the contest over the weekend after the retail business upped its ownership of API to 19 per cent and said it would vote against Sigma’s deal.
Wesfarmers’ offer landed at $1.55 per share, signaling a 35.4 per cent premium to the business’ closing share price as of 9 July, and a 36.8 per cent premium to its one-month weighted average.
API’s board recommends its shareholders vote in favour of the deal, which will still need to be approved by the ACCC, and which is expected to be completed in the first quarter of calendar year 2022.
According to Wesfarmers, the aim of the buy-up is to enable the conglomerate to enter the “growing health, wellbeing and beauty sector”.
“API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector,” Wesfarmers’ managing director Rob Scott said earlier this year.
“The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our business for growth over the long term.”