September 2002 issue Pharmacy Today magazine
GROUPS TO MERGE
Unichem's proposed acquisition of Zuellig retail brands Amcal and Guardian, came as no surprise when it was formally announced last month. The merger was first discussed at last year's Unichem conference, but it has taken this long to formalise due to the complicated nature of the move, and proposed pharmacy ownership changes.
The merger should be completed this year, and will enable the new company, Pharmalliance, to pursue pharmacy ownership under proposed legislative changes.
Amcal and Guardian brands are 100% owned by Zuellig Pharma, which has a 40% shareholding in Unichem Chemists Ltd. Therefore Amcal and Guardian members will not vote on the acquisition. Life, Unichem and Dispensary First pharmacies are shareholders in Unichem Chemists Ltd, and will vote at this month's general meeting.
In folding Amcal and Guardian brands into Unichem Chemists Ltd, Zuellig's shareholding will increase from 40% to 55%. Zuellig will sell down 5% allowing Amcal and Guardian pharmacies to hold shares. All Amcal and Guardian pharmacies will be able to purchase 1500 shares. Zuellig will be entitled to top up to 50% on a continuing basis. Tim Roper will be Pharmalliance's head, and the brands' managers will remain in their current roles.
The enlarged group sees 270 pharmacies come under the Unichem umbrella. Although that is less than a third of the total number of pharmacies, it represents 40% of pharmacy's OTC market turnover.
Zuellig chief executive, Peter Merton says all regulatory bodies' provisions, including the Commerce Commission, will be satisfied.
"Our legal advice is that the Commerce Commission does not need to be involved."
The Commerce Commission's manager of market structure, Richard Braae says they monitor transactions as they occur, and in some cases will investigate whether they breach market dominance laws.
Tim Roper says all brands will continue to operate competitively in the marketplace due to their unique position. "Pharmacies will still be operated by individuals, not a company, so they will still compete for the customer's dollar," he says.
Guardian and Dispensary First's future will be decided in 12 months. Zuellig will continue to operate the Vantage buying group, and the Vantage brand's services will be modified in a year.
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