Loblaw to buy Shoppers Drug Mart for $12.4B

[Superflyer]

Another big buy out, this one is interesting as well.

Loblaw, Canada's largest supermarket chain, has agreed to buy Shoppers Drug Mart for $12.4 billion, the companies announced early Monday.

Toronto-based Loblaw will acquire all outstanding common shares in Shoppers, gaining some 1,200 drug stores in all provinces — many of them small locations in urban markets — in return for cash and Loblaw shares.

http://www.cbc.ca/news/canada/toront...-shoppers.html

[Street Pharmacist]

I got my email this morning. Business as usual for Shoppers. At least for the time being

[Ducay]

Appears Canadian retail consumer goods market is consolidating a heck of a lot faster than anyone expected.
Good for their fight against US mega-competition, but not a huge fan of the majority of options now controlled by basically 2 families. Less choice and competition is rarely a good thing.

All that's left is for Loblaws to buyout Pattison's Save-On-Foods and the entire market is either Sobeys or Loblaw

[Yanda]

how does co-op fit into this? are they not a legitimate retailer outside of western canada?

[Ace]

I don't think Co-op could ever be sold due to its corporate structure. It's basically a customer owned chain I think.

[GP_Matt]

Does anyone know if this is a sure thing or if the shareholders have to ratify it first?

[bizaro86]

Originally Posted by GP_Matt

Does anyone know if this is a sure thing or if the shareholders have to ratify it first?

They do have to, but they will. The bid was at a big premium, so the shareholders will take their huge profits and do something else with them. Those who still like the business can keep their Loblaw stock. Approval is a formality unless someone bids more, but I can't think of anyone that would. (Maybe a big US drug chain?)

[Senator Clay Davis]

Considering Shoppers shareholders are getting a 29% premium to be bought out, I'll be surprised if this doesn't go through.

[GP_Matt]

Originally Posted by Yanda

how does co-op fit into this? are they not a legitimate retailer outside of western canada?

Co-Op is also a common name for completely independent cooperatives.
Calgary Co-Op only operates around Calgary. I don't think Edmonton has a Co-Op and the one in Grande Prairie is different. Same Co-Op Gold branding but independent which would make it difficult to buy out and also difficult to grow it into a large competitor.

[The Yen Man]

$12.4B is quite a lot. I had no idea Shoppers Drug Mart was that big a size of company.

[Street Pharmacist]

Originally Posted by Senator Clay Davis

Considering Shoppers shareholders are getting a 29% premium to be bought out, I'll be surprised if this doesn't go through.

And Galen Weston holds like 60% of Loblaws shares so that's a formality. Only potential pitfall is regulatory approval.

[GP_Matt]

The reason I ask is because a lot of the employees are shareholders who might turn down profits if they are worried their job is in danger. The bigger shareholders are likely in management and associate positions.
I have no idea of the scale though and as I calculate it in my head I can see that they wouldn't have nearly enough weight to sway the vote.
Carry on.

[Street Pharmacist]

Originally Posted by GP_Matt

The reason I ask is because a lot of the employees are shareholders who might turn down profits if they are worried their job is in danger. The bigger shareholders are likely in management and associate positions.
I have no idea of the scale though and as I calculate it in my head I can see that they wouldn't have nearly enough weight to sway the vote.
Carry on.

Employees and Associate Owners are by very far a minority owner.

[bizaro86]

Originally Posted by GP_Matt

The reason I ask is because a lot of the employees are shareholders who might turn down profits if they are worried their job is in danger. The bigger shareholders are likely in management and associate positions.
I have no idea of the scale though and as I calculate it in my head I can see that they wouldn't have nearly enough weight to sway the vote.
Carry on.

The statement was they weren't closing any stores, but who knows.

In terms of them blocking it, you're right they wouldn't own enough shares. This site: http://www.answers.com/topic/shopper...rt-corporation suggested 53,000 employees. If the employees owned the 50% of the stock needed to block the merger, that would be about $117,000 per person, which is probably much too high for the vast majority of them. Some of the managers/franchise owners may have that much or more, but the average wouldn't be nearly that high.

[CaptainYooh]

So, now SDM will slowly transform into RCS... Do not like.

[Regulator75]

Originally Posted by CaptainYooh

So, now SDM will slowly transform into RCS... Do not like.

Maybe SDM will now stop charging $4.49 for a $2.49 package of crackers / cookies or any other random dry goods.

[CaptainYooh]

Originally Posted by Regulator75

Maybe SDM will now stop charging $4.49 for a $2.49 package of crackers / cookies or any other random dry goods.

Maybe. But then we'd have to wait twice longer at the cash register.

[Northendzone]

wonder if the price of pop will remain the same at the RCS Liquor Store?

[Brannigans Law]

I really dislike how everything is owned by fewer and fewer people. People wonder why the top 1% (and fewer frankly) own so much wealth. Gross. Pretty soon it will be like demolition man where taco bells owns all restaurants.

[Reaper]

Originally Posted by CaptainYooh

So, now SDM will slowly transform into RCS... Do not like.

WTF is RCS?