TORONTO Aug 28 Loblaw Co Ltd, which last
month announced a C$12.4 billion ($11.9 billion) deal to buy
Shoppers Drug Mart Corp, will submit its application to
the competition bureau after investors vote on the deal next
month, Shoppers' chief executive said on Wednesday.
Shareholders of pharmacy chain Shoppers are expected to
approve the acquisition, Canada's biggest deal so far this year,
when they vote at a special meeting on Sept. 12, CEO Domenic
Pilla told Reuters.
"We will submit an application to the competition bureau
shortly after the shareholder meeting and then work with the
bureau to get approval as quickly as possible," he said. "We
expect the shareholders to approve the transaction."
Loblaw, Canada's largest food retailer, made the deal with
Shoppers, Canada's biggest pharmacy chain, amid intensifying
competition from the likes of Wal-Mart Stores Inc,
Target Corp and domestic competitors.
Canadian rival Empire Co Ltd, which operates the
Sobeys grocery chain, cemented its position as the country's No.
2 grocery when it moved to acquire Safeway Inc's
Canadian assets for $5.7 billion in June.
The deal will give Loblaw immediate access to Shoppers'
lucrative network of stores in dense urban neighborhoods.
The pharmacy chain, which is facing its own challenges as
pricing controls for generic drugs tighten in Canada, has
expanded in other areas, particularly in the beauty category,
where Pilla says it is now the market leader in Canada.
Pilla, who was attending an opening in Toronto of the
chain's new beauty boutique format, said further details on how
the companies would merge and brand their offerings would come
after Canada's Competition Bureau approves the deal.
Executives at both companies said they do not foresee having
to sell substantial assets to meet regulatory requirements, and
said the transaction would not significantly change market share
in their food and pharmacy businesses.
But Pilla said customers should expect fresh foods, a
greater selection of frozen foods and prepared meals, more
exposure to meats and diary, and bakery goods.
"We definitely envisage an enhanced food offering to our
Shoppers Drug Mart stores, absolutely. I wouldn't characterize
them as a grocery store, but I would characterize them as a
total grocery shop in a convenience format," he said.
The companies have said they expect the deal to close by the
end of the first quarter of 2014.