Loblaw to divest 18 stores, 9 pharmacies in Shoppers Drug Mart deal

Loblaw is planning to sell 18 stores and nine in-store pharmacies as part of its $12.4-billion acquisition of Shoppers Drug Mart Corp. The deal, which was announced Mar. 21, will result in the merger of Canada's biggest chains in their respective retail sectors.

Documents from Canada's Competition Bureau also outline restrictions on certain Loblaw programs and agreements for up to five years. These mandates would require Loblaw to limit the supply of various products for retail sale.

Without such restrictions, the proposed transaction would likely lead other retailers to pay higher wholesale prices to their suppliers, potentially resulting in higher retail prices for consumers, the Bureau said.

"This agreement addresses the most significant negative competitive effects of the merger by ensuring that consumers continue to benefit from competitive prices in the retail sale of drugstore and pharmacy products in Canada," John Pecman, commissioner of competition, said in a statement. "The Bureau will continue to investigate Loblaw's programs related to its relationship with suppliers to ensure that Canadian consumers benefit from vigorous competition."

Stores to be divested in the deal include 14 Shoppers Drug Mart stores, three No Frills stores and a Save-Easy location. Nine of the divested stores and seven of the in-store pharmacies to be divested are located in Ontario.

Loblaw expects the deal to close on March 28 and said it did not expect any store closures as a result of the divestitures.

For more:
-See this Supermarket News article

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