Loblaw, Canada’s largest grocery retailer, is offering to buy Shoppers Drug Mart, the country’s largest pharmacy chain for C$12.4 billion.
At a press conference today, Galen Weston Jr., executive chairman of Loblaw, assured consumers, saying, “This is not an overlapping, scaling up transaction when you really get into the detail.” He said the deal will allow the two companies, which will continue to operate separately, to play on each other’s strengths, and expand product lines in both businesses.
Loblaw will gain access to over 1200 Shoppers Drug Mart locations across Canada, and the valued loyalty plan, one of the most successful in Canada. Galen Weston Jr., and Shoppers’ chairman, Holger Kluge assured employees no stores would be closed and no front-line workers would lose their jobs as a result of the merger.
Today’s announcement follows another deal between Canadian grocery chains Sobeys and Safeway. Last month Sobeys, based in eastern-Canada, agreed to buy more than 200 Safeway stores in western Canada for C$5.8 billion.
These moves are in response to the arrival of giant American discount retailers Walmart and Target, which both offer groceries.
Loblaw made international headlines as one of the 17 Canadian and U.D. retailers who signed a five-year pact aimed at increasing safety and working conditions in Bangladesh factories.
Carmel Kilkenny spoke with David Soberman of the Rotman School of Management in Toronto to hear more about what Canadians can expect.
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