In line with regulatory approval of its acquisition of Shoppers Drug Mart Corp., Loblaw Cos. plans to sell two Shoppers Drug Mart drug stores to Jean Coutu Group and two No Frills supermarkets to Metro Inc.


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Loblaw to sell some stores to Coutu and Metro

July 22nd, 2014

OTTAWA – In line with regulatory approval of its acquisition of Shoppers Drug Mart Corp., Loblaw Cos. plans to sell two Shoppers Drug Mart drug stores to Jean Coutu Group and two No Frills supermarkets to Metro Inc.

Canada's Competition Bureau said late Monday that it has approved the sale of the Shoppers Drug Mart and No Frills stores to Jean Coutu and Metro, respectively, as well as the license of nine Loblaw in-store pharmacies Remedy's Rx, a Markham, Ontario-based independent pharmacy network.

The sales stem from the March consent agreement between Loblaw and the bureau regarding the $12.4 billion (Canadian) acquisition of Shoppers Drug Mart, announced in July 2013.

"The transactions will preserve competition in the retail sale of pharmacy products and drug store-type merchandise in Canada," the Competition Bureau stated.

The bureau noted that when conducting its review of Loblaw's acquisition of Shoppers Drug Mart, it examined retail competition in every market that had both a Loblaw-owned supermarket and a Shoppers Drug Mart drug store. Competition concerns were identified in 27 markets. As part of the consent agreement, Loblaw must sell the remaining 14 retail stores.

"That process is ongoing. The stores are to be sold to a new owner that will continue to operate them. The agreement does not permit Loblaw to simply close them," the bureau said.

The two Shoppers Drug Mart stores being sold to Jean Coutu are in Dalhousie and St. Stephen, New Brunswick, while the pair of No Frills stores being purchased by Metro are in Blenheim and Elmira, Ontario.

According to the bureau, competitive concerns in those four markets encompassed pharmacy products in the grocery store — such as prescription drugs and over-the-counter — as well as "drug store-type merchandise," including health and beauty aids, household items and certain food products (such as milk, eggs and cookies), all of which are sold in both Shoppers Drug Mart and Loblaw stores.

Remedy's will be licensed to operate pharmacies in seven Loblaw-owned stores in Ontario and two in Newfoundland. Remedy's operates a retail banner buying group with 275 independent members in six provinces and owns and operates more than 25 pharmacy locations in Canada.

Jean Coutu's franchised store network includes 414 retail stores in Quebec, New Brunswick and Ontario. Metro operates a network of nearly 600 food stores more than 250 drug stores in Quebec and Ontario.

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