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.
Shoppers Drug Mart will keep its brand name and operate as a separate division of Loblaw. Store closings are not expected and the continued use of 'associate owners' (franchises, essentially) at Shoppers Drug Mart will continue.
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.
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.
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.