Loblaw purchases Shoppers Drug Mart for US$11.9 billion

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Canada's biggest food retailer, Loblaw Cos Ltd., would purchase Shoppers Drug Mart Corp for Can$12.4 billion or US$11.9 billion. The purchase would transpire as it vies against Target Corp and Wal-Mart Stores Inc.

Loblaw said that purchasing Canada's largest pharmacy chain would allow it to create a retail giant. This would result to Can$42 billion income. Loblaw would also be allowed to gain access to the rising small-urban retail sector.

Loblaw offered Can$61.54 in cash and stake. This represented a premium of 27% to Shoppers Drug Mart's closing last Friday on the Toronto Stock Exchange. The stockholders of Shoppers Drug Mart would be given the choice to either obtain Can$61.54 in cash or 1.29417 Loblaw common stocks. The stocks would include Can$0.01 in cash for every stock held. The highest amount of cash that Loblaw would pay would be around Can$6.7 billion.

"With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace," Galen Weston, Loblaw's Executive Chairman, said.

Tags
WalMart, Acquisition of assets

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