Inside This Issue - News
Loblaw wraps up acquisition of Shoppers Drug Mart
April 7th, 2014
TORONTO – Loblaw Cos. has closed its acquisition of Shoppers Drug Mart, finalizing the deal a week after Canada’s Competition Bureau approved the transaction.
The $12.4 billion (Canadian) acquisition, announced in July, brings together Canada’s largest supermarket operator and Canada's largest drug chain.
“The most successful partnerships are grounded in strengths that complement each other,” stated Galen Weston, executive chairman of Loblaw Cos. “Loblaw and Shoppers Drug Mart are perfect partners. We will drive growth and profitability through our unmatched mix of store formats, products and offerings. This is truly a case of the whole being greater than the sum of its parts.”
The merged company has 2,348 stores and 1,797 pharmacies. In 2013, on a pro forma basis, the combined company had revenue exceeding $43 billion and earnings before interest, taxes, depreciation and amortization of about $3 billion.
“Consumers are more focused on health and wellness, and they are demanding more convenient retail locations,” commented Loblaw president Vicente Trius. “Working together, we will capitalize on these consumer trends and create a compelling new blueprint for future growth and profitability.”
Domenic Pilla remains president of Shoppers Drug Mart, which is now a separate operating division of Loblaw. “I am very excited about our partnership with Loblaw, a company which also has a rich retail legacy of providing Canadians superior choice and value,” Pilla stated. “Together, we can learn from each company’s expertise to grow and create exciting opportunities for our two businesses and for Shoppers Drug Mart associate-owners.”
With the Competition Bureau’s approval, Loblaw agreed to divest 18 stores — 14 of them Shoppers Drug Mart outlets — and sell nine in-store pharmacies to independent operators.
The bureau noted in filing the consent agreement that the acquisition “would likely result in a substantial lessening or prevention of competition in the retail sale of pharmacy products and drug store-type merchandise in Canada, and in respect of certain Loblaws programs and agreements with suppliers.”
Competition Bureau commissioner John Pecman stated: “This agreement addresses the most significant negative competitive effects of the merger by ensuring that consumers continue to benefit from competitive prices in the retail sale of drug store and pharmacy products in Canada. The bureau will continue to investigate Loblaws programs related to its relationship with suppliers to ensure that Canadian consumers benefit from vigorous competition.”
Loblaw said that it will cooperate with the bureau in its review and that it is committed to supplier practices that meet the bureau’s objectives of maintaining competitive markets.