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Loblaw will buy Shoppers Drug Mart for $12.4 billion in cash and stock. Loblaw is Canada’s largest grocery retailer, while Shoppers is Canada’s largest pharmacy chain.
Loblaw
anticipate a ‘cross marketing’ of each company’s products, including
Loblaw President Choice and Blue Menu brands and Shopper’s Life brands. Cross marketing would extend to their loyalty points programs as well.
The
deal will require approval by at least 2/3 of the votes case by
Shoppers Drug Mart shareholders at a special meeting expected to take
place in September. A majority of Loblaw shareholders must also approve the deal because of the number of shares being issued.
If
the combination had been completed last year, the business would have
had about $42 billion of revenue and $1 billion of free cash flow. The
companies expect to produce $300 million in cost savings after three
years, without store closures.
Last month we reported that Canada Safeway was bought by Sobeys for $5.8 billion. 2013 is proving to be a year of significant retail mergers and purchases by some of Canada’s largest companies.
This would likely mean an end to Shoppers' Simply Food brand and maybe Quo as well. I hope to see Joe Fresh Beauty at Shoppers, too.
We wonder if they will be discontinued? If they're doing well, they could be cross-integrated into Loblaw stores. Of course we're only speculating but we are personally fans of several Simply Food products and hope they aren't discontinued.
They are doing good. I like its store and it might be best online canadian pharmacy also.