Watchdog gives nod to Dis-Chem’s acquisition of Columbia Falls Properties

The Competition Tribunal has approved Dis-Chem Pharmacies’ acquisition of Columbia Falls Properties 7, a move that will give the pharmaceutical group ownership of the key Midrand property housing its distribution centre and head office.

The approval, granted without any conditions, marks a strategic shift for Dis-Chem as it consolidates control over its core distribution infrastructure.

The transaction involves Dis-Chem Distribution, a subsidiary of Dis-Chem Pharmacies, taking full ownership of Columbia Falls, which owns the Midrand warehouse.

With the acquisition, Dis-Chem aims to secure its supply chain and enhance operational efficiency. The group manages its own warehousing and distribution, using company-owned or leased properties to store and distribute products across its retail network. The Midrand site is a critical hub for pharmaceutical and nonpharmaceutical products.

The property deal was originally inked earlier this year in a transaction involving the company’s founders and other top executives, who own Columbia Falls. At the time, Dis-Chem was paying R55m a year in rent, or about R4.6m monthly.

The group defended the move, saying owning the Midrand facility aligned with its long-term strategy to ensure Dis-Chem owns all its core distribution centres.

In addition to its real estate consolidation, Dis-Chem is making strategic moves into other sectors. In June Dis-Chem said it had acquired a 50% stake in financial services company OneSpark for nearly R156m as part of its strategy to expand beyond pharmaceuticals.

The group viewed this move as a step towards enhancing its integrated health ecosystem, with OneSpark’s expertise in technology-driven life insurance products complementing Dis-Chem’s healthcare vision. Founded in 2020, OneSpark specialises in innovative, AI-driven insurance solutions.

Dis-Chem said it believed this acquisition would strengthen its ability to provide a comprehensive customer value proposition, focused on increasing access to affordable, quality healthcare.

The partnership aligns with the group’s strategic goal of delivering healthcare services through a more holistic approach, incorporating financial services expertise to support its broader healthcare offering.

“The transactions allow Dis-Chem to own three of its five distribution centres and achieve a reduction in rental expenses incurred outside the group,” it said. “The ownership of the assets ensures that the group holds the necessary strategic assets for long-term growth.”

goban@businesslive.co.za