Woolworths $850 million bid to acquire Australian Pharmaceutical Industries (API), the parent company of Priceline, was withdrawn in January. Now the Australian Competition and Consumer Commission (ACCC) has given the all-clear to the $764 million offer from Wesfarmers tabled in November.
Wesfarmers owns Kmart, Target, Bunnings and Officeworks and the regulator focused its deliberations on whether the proposed buyout would reduce competition and exert greater control over consumer data. The company also owns 50 per cent of Flybuys and the potential acquisition of the Priceline Sister Club loyalty program, in addition to retailing a high volume of beauty and personal care products through its Kmart, Target and Catch marketplace businesses, could have posed a major hurdle.
According to Stephen Ridgeway, ACCC Commissioner – “Our investigation showed that there are large and well-established retailers, including Chemist Warehouse, Woolworths and Coles, that will compete strongly with Wesfarmers after the acquisition in both the market for over-the-counter pharmaceuticals and the market for beauty and personal care products.
“Wesfarmers acquiring the Priceline Sister Club loyalty scheme will not have a lock-in effect on consumers in any market. Customers generally do not only join one loyalty scheme, and major competitors to Wesfarmers after the acquisition will have, or start, their own customer loyalty schemes.”
Wesfarmers already owns a 19.3 per cent share of API and the last barrier to the proposed buyout of the Priceline parent requires the shareholders to vote in favour of the deal. Once the final vote is in, the acquisition is expected to go ahead by the end of March.
A key part of the Wesfarmers takeover is to ultilise its e-commerce, data and digital capabilities to fast-track API’s online business and boost customer engagement, including in-store foot traffic and sales for community pharmacists.