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Loblaw to Acquire Shoppers Drug Mart For $12.4 Billion

Murray Koffer's renowned Shoppers Drug Mart chain will still maintain its brand name

By: Ashley Peters
Published: July 15th, 2013 in Business » World
A Shoppers Drug Mart store

Loblaw Companies Ltd., Canada’s juggernaut of grocery and pharmacy, announced Monday its consolidation with Canadian pharmacy retailer Shoppers Drug Mart in a $12.4 billion settlement that is pending shareholder and regulatory approval.

As the contract stipulates, Shoppers will retain its brand name and will function as a separate entity from Loblaw.

The acquisition comes in the wake of Canadian retailers facing a groundswell of competition from large U.S. chains, like Target, which began setting up its shops across the country earlier this year.

Adopting the style of Walmart, Costco, and domestic retailer Sobeys, Loblaw is also offering the chain-store trifecta of merchandise, pharmacy, and grocery products.

The executive chairman of Loblaw, Galen Weston, believes Shoppers Drug Mart is the best possible link-up. "I have long believed that the next chapter for growth at Loblaw should be based in a vision that combined health, wellness and nutrition. Loblaw combining with Shoppers Drug Mart is the ultimate expression of that vision," Weston said in a conference call with analysts Monday.

Loblaw is presenting $33.18 in cash along with about six-tenths of a Loblaw share for each Shoppers Drug Mart common share. Exploiting Friday’s closing price, the offer is valued at $61.54 per Shoppers Drug Mart common share — sitting at 29 per cent above the recent average trading price for the Shoppers stock.

Loblaw executives informed analysts that they don't foresee any store closings as a result of this deal.

Murray Bernard Koffler is the Canadian, Jewish businessman responsible for creating the pharmacy retailer, Shoppers Drug Mart, otherwise internationally regarded as Super-Pharm.

Related articles: Shoppers Drug Mart, Loblaw, Loblaws, Murray Koffer, Target, Sobeys, Super-Pharm
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