(Adds details of proposal, quote, background) Dec 14 (Reuters)...

(Adds details of proposal, quote, background)

Dec 14 (Reuters) - Drug distributor Australian Pharmaceutical Industries (API) (API) said on Friday it had offered about A$727 million ($524.9 million) to buy all of peer Sigma Healthcare Ltd (SIG) , aiming to consolidate in the face of increased competitive and regulatory pressures.

API said the deal represented a premium of 69.4 percent to Sigma's last closing price of A$0.405. The proposal included 0.31 API shares and A$0.23 cash for each Sigma share, equating to A$0.686 each.

API shareholders would own about 63 percent of the combined entity if the cash-and-stock deal succeeded, API said in a statement. API already owns nearly 13 percent of Sigma.

"In the face of slowing revenue growth, projected margin and revenue pressures due to government policy and also increased competition, the merged business would provide scale and volume," API Chairman Mark Smith said in a statement.

“The real benefits of the proposed merger come from infrastructure and back-office cost savings."

API intended to retain both companies' retail brands after the deal, he added.

API said it expected the acquisition to immediately add to earnings per share and deliver annualised gross cost savings of A$60 million by year three of the merger.

This proposal is the latest in a series of deals in Australia's healthcare sector, such as hospital operator Healthscope's (HSO) sale of its Asian pathology business to TPG Capital Management LP and Sirtex Medical's (SRX) $1.4 billion buyout by a Chinese consortium.

Most recently, Australian pathology and radiology group Sonic Healthcare Ltd (SHL) agreed to buy Florida-based Aurora Diagnostics LLC for $540 million. ($1 = 1.3850 Australian dollars)