Loblaw Companies Limited completed the acquisition of Shoppers Drug Mart Corporation for $12.4 billion in cash and stock, bringing together the nation's number one grocery retailer and its number one pharmacy and beauty retailer. The deal was announced in July 2013.
The transaction, the largest Canadian retailer acquisition in history, transforms the Canadian retail landscape. The acquisition brings Loblaw and Shoppers within closer reach of more Canadians with more than 2,300 stores (corporate, franchised and associate-owned) and nearly 1,800 pharmacies totalling 65 million square feet of selling space.
On a pro-forma basis in 2013, the combined company generated revenue in excess of $43 billion and EBITDA of $3 billion. The combination of companies is expected to yield cost synergies of $300 million phased in evenly over the next three years. First-year synergies are expected to come from the cost of goods sold and purchasing efficiencies in goods not for resale. Planned synergies are not dependent on any store closings.
Torys LLP represented Loblaw and Weston with a team including Peter Jewett, Cornell Wright, Raegan Kennedy, Adrienne DiPaolo and David Forrester (M&A); Tom Zverina, Adam Delean and Adrienne Love (lending); James Tory and Andrew Gray (litigation); Mitch Frazer and Lynne Lacoursière (pension and employment); Jay Holsten and Omar Wakil (competition); and Conor McCourt (intellectual property) and John Unger (tax).
Borden Ladner Gervais LLP represented Loblaw, with respect to competition matters, with a team including Rob Russell, Denes Rothschild, Zirjan Derwa, Neil Morgan and Jonathan Asselstine.
Osler, Hoskin & Harcourt LLP represented Shoppers with a team led by Clay Horner and Doug Bryce corporate) and Peter Glossop (competition), and included Shuli Rodal and Matthew Anderson competition); Emmanuel Pressman, Don Gilchrist, David Vernon, Alex Gorka and Rob Anton corporate); Firoz Ahmed, Dov Begun and Amanda Heale (tax); and Laura Fric and Mark Gelowitz litigation).
Davies Ward Phillips & Vineberg LLP represented Bank of America Merrill Lynch and the syndicate of lenders in connection with the $5.1-billion financing for the acquisition with a team including Patricia Olasker and Steven Harris (M&A); and Carol Pennycook and Derek Vesey (lending).