It has appeared that Life Pharmacy has entered into a merger agreement for buying 100% of Pharmacybrands in a share swap, a move that will make it the biggest pharmaceutical retailer in New Zealand.

An option of selling the shares would be given to Pharmacybrands shareholders, in order to receive 39.783 Life Pharmacy shares per Pharmacybrands share (valued at $19.55 per each).

"The offer values Pharmacybrands at around $20 million, or $19.55 per Pharmacybrands share, and Life Pharmacy at approximately $36.2 million," said a source.

It should be noted that $4.2 million of the shares are being bought by Life Pharmacy before the share swap offer, which are currently partly paid.

The new Life Pharmacy board, whose members will include Peter Merton, Ian Sharp and Bill Meaney, will be a merger of the two existing company's boards.

Life Pharmacy chief financial controller Craig Wilson, said: "With around 30 partly owned pharmacies, 220 franchised pharmacies and a presence in most towns and cities, the merged organization will extend a broad national footprint and will be representative of the total pharmacy industry."

He added: "The merged entity's operations will range from community pharmacies to high end retail outlets with exclusive ranges of fashion and beauty products, and will have the range, relationships, scope and expertise to meet the needs of a wide range of customers, wherever they are. As well as providing that fundamental strength, this merger will also create an organization with the scale and diversity that allows it to act as an effective voice within the industry and with the credibility it needs to represent the pharmacy channel in a delicately poised regulatory environment."