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Loblaw Companies Limited To Acquire Shoppers Drug Mart Corporation For $12.4 Billion In Cash And Stock

Transformational combination brings together two iconic businesses to deliver more choice, value, and convenience to help Canadians live life well
  • Combines best-in-class pharmacy and food businesses to create a unique retailer with unmatched capabilities in health & wellness and nutrition
  • Loblaw gains powerful footprint in the important and growing small-urban store sector
  • Retaining its name and brand, Shoppers Drug Mart will operate as a separate division of Loblaw and expand its product offerings to include Loblaw's private label and convenience food
  • Combined company generated, on a 2012 pro forma basis, revenues in excess of $42 billion, EBITDA* of $3 billion, and annual free cash flow* of $1 billion

BRAMPTON AND TORONTO, ON, July 15, 2013 /CNW/ - Loblaw Companies Limited (TSX: L) and Shoppers Drug Mart Corporation (TSX: SC) today announced a definitive agreement under which Loblaw will acquire all of the outstanding Shoppers Drug Mart common shares for $33.18 in cash plus 0.5965 Loblaw common shares per each Shoppers Drug Mart common share, on a fully pro rated basis. Using the Loblaw closing common share price on July 12, 2013, this amounts to $61.54 per Shoppers Drug Mart common share. This price represents a 29.4% premium to the 20-day VWAP of Shoppers Drug Mart common shares as of July 12, 2013.

This strategic union will enhance the companies' competitive positioning in an evolving retail landscape, creating new growth opportunities for shareholders, more and better choices for customers, and greater convenience through Shoppers Drug Mart's footprint in the important and growing small-urban store sector.

Creating Compelling New Blueprint for Serving Canadian Customers

"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."

"Our customer proposition is at the heart of this combination," said Vicente Trius, President of Loblaw.  "Together, we will be able to significantly enhance the customer experience by offering even greater assortments, service, value and convenience while preserving the unique shopping experiences that make both companies leaders in their respective segments. We are extremely happy to welcome Shoppers Drug Mart and its talented people, including their entrepreneurial and trusted Associate-owners, who are well-known for their patient care and friendly customer service.  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.

"This acquisition also will allow us to accelerate our success in driving growth and profitability at Loblaw organically. Our customer proposition continues to deliver results, and I am enthusiastic about the prospect of value creation opportunities on multiple fronts," Mr. Trius concluded.

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