Loblaw Cos., Canada's largest food retailer, has agreed to acquire Shoppers Drug Mart Corp., the nation's largest drug chain, in a $12.4 billion (Canadian) cash and stock deal.


Loblaw, Shoppers Drug Mart, Galen Weston, food retailer, drug chain, Canada














































































































































































INSIDE THIS ISSUE
News
Opinion
Other Services
Reprints / E-Prints
Submit News
White Papers

Retail News Breaks

Loblaws to buy Shoppers Drug Mart

July 15th, 2013

BRAMPTON, Ontario – Loblaw Cos., Canada's largest food retailer, has agreed to acquire Shoppers Drug Mart Corp., the nation's largest drug chain, in a $12.4 billion (Canadian) cash and stock deal.

The companies said Monday that under the agreement, Loblaws will pay $33.18 per share in cash as well as 0.5965 of a Loblaw common share per each SDM common share on a pro-rated basis.

Based on Loblaws' closing share price on July 12, this amounts to $61.54 per SDM common share. The maximum cash outlay to be paid by Loblaws will be around $6.7 billion, to be funded from available cash and debt.

"This transformational partnership changes the retail landscape in Canada," Galen Weston, executive chairman of Loblaws, said in a statement. "With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace. This combination creates a compelling new blueprint for the future, positioning us to capitalize on important trends in society, from the emphasis on health, wellness and nutrition, to the imperatives of value and convenience.”

Based on 2012 pro forma figures, the combined company generated more than $42 billion in revenue; $3 billion in earnings before interest, taxes, depreciation and amortization; and $1 billion in free cash flow. The combination is expected to generate double-digit accretion to earnings, adjusted for intangibles amortization, in the first year.

More Retail News Breaks >>
Advertisement