Metro Inc has announced that it has reached agreement with the Great Atlantic & Pacific Tea Company, Inc. and its subsidiary, A&P Luxembourg, to acquire all of the issued and outstanding common shares of A&P Canada, for an acquisition price of C$1.7bn (US$1.4bn).

A&P Canada operates 236 food stores throughout Ontario under the A&P, Dominion, Food Basics, The Barn and Ultra Food & Drug banners, with annual sales of $4.4bn and more than 32,000 employees.

Upon completion, Metro will have a network of 579 food stores, including 283 outlets in Ontario with annual sales approaching $11bn. With its Metro, Metro Plus, Super C, Loeb and Brunet banners, METRO is currently a leader in the food and pharmaceutical industries in Quebec and eastern Ontario, with annual sales of $6.1 billion and more than 33,000 employees.

"We are very pleased to be acquiring A&P Canada, the second largest food retailer in Ontario, with its strong management team and significant presence in the high-growth Greater Toronto Area, Canada's largest market," said Pierre H. Lessard, president and CEO of Metro. "The acquisition, combined with our current operations in eastern Ontario and our leading position in Quebec, significantly enhances Metro's strategic position in Canada's two largest markets. This is a unique opportunity to transform Metro's strong regional base into a significantly larger platform with increased scale and geographic diversification. The strategic and geographic fit between our two companies is compelling and with the continued presence of GAP as an important shareholder of Metro, I am confident that together, we will continue to innovate, grow and deliver value to our customers and shareholders."