Loblaw Companies Limited is buying Shoppers Drug Mart Corporation for $12.4 billion in cash and stocks.
Langley is home to retail stores of both companies.
"This transformational partnership changes the retail landscape in Canada. With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace," said Galen G. Weston, executive chairman of Loblaw. "This combination creates a compelling new blueprint for the future, positioning us to capitalize on important trends in society, from the emphasis on health, wellness and nutrition, to the imperatives of value and convenience."
The two companies generated in excess of $42 billion in revenue in 2012.
"We intend to preserve the great strengths of what the company has built by keeping Shoppers Drug Mart as a separate division of Loblaw, with its own dedicated management team led by Domenic Pilla," said said Vicente Trius, Loblaw president.
The deal, which must be approved by the courts, is expected to be done in six to seven months. The boards of both companies have approved the sale.
Domenic Pilla, President and Chief Executive Officer of Shoppers Drug Mart, said: "We are delighted to partner with Loblaw to leverage our combined strengths. For our shareholders, this transaction provides significant and immediate value, as well as the ability to benefit from future upside by virtue of their continued ownership of shares in the combined company. For our Associate-owners and employees, who are a valued part of the equation, it provides the opportunity to pursue rewarding careers as we grow together. And for our customers, it provides more locations with an enhanced mix of products and offerings that contribute to the good health of Canadians."
The combination is expected to yield annual cost synergies of $300 million by year three, phased in evenly over the first three years following closing. These synergies are not dependent on any store closings.
Loblaw Companies Limited, a subsidiary of George Weston Limited, is Canada's largest food retailer and a leading provider of drugstore, general merchandise and financial products and services.
It is one of the largest private sector employers in Canada. With more than 1,000 corporate and franchised stores from coast to coast, Loblaw and its franchisees employ approximately 134,000 full-time and part-time employees.
With 1,242 Shoppers Drug Mart and Pharmaprix stores operating in prime locations in each province and two territories, the Company is one of the most convenient retailers in Canada.
The Company also licenses or owns 57 medical clinic pharmacies operating under the name Shoppers Simply Pharmacy (Pharmaprix Simplement Sant in Qubec) and six luxury beauty destinations operating as Murale. As well, the company owns and operates 62 Shoppers Home Health Care stores, making it the largest Canadian retailer of home health care products and services.
In addition to its retail store network, the Company owns Shoppers Drug Mart Specialty Health Network Inc., a provider of specialty drug distribution, pharmacy and comprehensive patient support services; and MediSystem Technologies Inc., a provider of pharmaceutical products and services to long-term care facilities.
@ Copyright 2013