The Wesfarmers Ltd (ASX: WES) share price finished in the green today amid another acquisition milestone.
Wesfarmers shares were trading at $50.68 at market close, a 0.7% gain. In comparison, the S&P/ASX 200 Index (ASX: XJO) slipped 0.22%.
Let’s take a look at what could impact Wesfarmers in the future.
What challenges lie ahead?
Wesfarmers recently received shareholder approval to take over Australian Pharmaceutical Industries (ASX: API), the owner of Priceline. Today, the Federal Court approved the scheme of arrangement for this acquisition.
However, many of API’s Priceline network pharmacies are independently owned franchises. This means Wesfarmers will need to work with 1400 independent retailers, The Financial Review reported.
The publication quoted former financial services chief executive Andrew Reitzer, who has previously said working with independently owned retailers was like “herding cats”.
The problem with this business model is that independent retailers are exactly that – fiercely independent. They have strong opinions on what works best for their business and don’t like being told what to do and when to do it.
Wesfarmers CEO Rob Scott has acknowledged the differences working with franchises but also recognises the similarities, the publication reported. He said:
There are differences in terms of managing a successful franchise group, but there are a lot of basic principles around product, pricing, supply chain, digital engagement and e-commerce that will still be very relevant.
API shares will be suspended from the close of trading on 22 March.
WAM Leaders Ltd (ASX: WLE) portfolio manager John Ayoub has recently named Wesfarmers as one of five reliable shares that can ride out 2022 volatility.
Wesfarmers share price snapshot
The Wesfarmers share price has climbed 0.14% in the past 12 months but lost 14.54% in the year to date.
Over the past month, Wesfarmers shares have jumped 0.54% and are 3.05% higher in the last week.
Wesfarmers has a market capitalisation of about $57.5 billion based on the current share price.
The post Wesfarmers (ASX:WES) now has control of API, but is the real fight just beginning? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Wesfarmers right now?
Before you consider Wesfarmers , you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Wesfarmers wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- 5 ASX shares to ride out the 2022 volatility: expert
- Analysts name the best ASX 200 dividend shares to buy now
- Wesfarmers (ASX:WES) shares in focus as API deal looks all but sealed
- Own Wesfarmers (ASX:WES) shares? Here’s how the numbers are looking in the API takeover vote
- Why my 2 biggest ASX shares are about to disappear: fund manager
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/MEnx2vq
Leave a Reply