Canadian supermarket giant Loblaw has said that it plans to increase the amount of food items available at Shoppers Drug Mart following its acquisition of the pharmacy chain.
In a statement yesterday (16 July), Loblaw announced that it has entered into a C$12.4bn (US$11.9bn) cash and stock deal to acquire Shoppers Drug Mart. This represents a 29.4% premium on Shoppers 20-day average share price, the company said.
The acquisition will expand Loblaw’s footprint of small-sized urban stores, Loblaw president Vicente Trius said during a media call to discuss the acquisition.
“Shoppers already has food space,” Tritus added. However, Loblaw expects to “considerably expand the productivity” of this space, he emphasised.
“We feel that we can put a very, very compelling offer based on fresh ready meals, frozen convenience food and healthy products – imagine going to a store and being able to do a very basic, full grocery shop,” Tritus said.
While Shoppers Drug Mart will operate as a stand-alone unit and retain its name, the banner will stock Loblaw brand food products, Loblaw revealed.
The deal follows on the heels of the $5.8bn purchase of Canada Safeway by Empire Company, which operates Sobeys supermarkets. Competition in the Canadian retail scene is also increasing as US giants Target and Wal-Mart step up their activities in the market.
