A giant drug company is to sell its drugs wholesale to smaller competitors in an effort to stem competition in a world where competition has become increasingly fierce.
Key points:The $3 billion acquisition of Australian Pharmacy Holdings by BHP Billiton would be the largest Australian drug company buyout in historyBHP has been the world’s largest pharmaceutical company by market capitalisation since 2001The acquisition would be part of a $3bn deal between the two companies which is expected to close in the first half of next year.
The deal would see BHP buy out Australian Pharmacies for $3.2 billion.
It will be a significant move for the company which currently holds a monopoly on the sale of prescription drugs in Australia.
“We are pleased to be able to announce that our acquisition of a significant stake in BHP will enable us to further strengthen our strategic position in Australia, in a competitive and global marketplace,” Australian Pharmacists Association (APA) President Chris Hodge said.
“This acquisition will support BHP’s continuing growth in Australia and in the global pharmaceutical sector.”
The merger is the biggest in Australian pharmacy history, and would be one of the biggest drug deals in history if completed.
It would allow BHP to become Australia’s biggest drug company.
It is the largest deal to be completed by a private equity firm since a $2.5 billion deal between UnitedHealth Group and Abbott Laboratories was completed in 2012.
It was announced in October 2016, and the deal was completed this week.
The APA is Australia’s largest trade union, with around 10,000 members and a membership of more than 100 million.
Mr Hodge praised the merger, saying the “bigger the company, the better”.
“We will see the future of the APA, our members and our industry,” he said.