Loblaw’s acquisition of Shoppers Drug Mart is complete
It’s official. Loblaw has completed its acquisition of Shoppers Drug Mart Corporation, which is now a separate operating division of Loblaw.
"The most successful partnerships are grounded in strengths that complement each other," said Galen G. Weston, executive chairman, Loblaw. "Loblaw and Shoppers Drug Mart are perfect partners. We will drive growth and profitability through our unmatched mix of store formats, products and offerings. This is truly a case of the whole being greater than the sum of its parts."
Loblaw said that the acquisition strengthens both companies’ competitiveness in an evolving retail landscape, creating new growth opportunities for shareholders. It will give consumers more choice, value and convenience through Canada’s largest retail network of unmatched store formats, including Shoppers Drug Mart’s important and growing footprint in the small-urban store sector, the company said.
"Consumers are more focused on health and wellness and they are demanding more convenient retail locations," said Vicente Trius, president, Loblaw Companies Limited. "Working together, we will capitalize on these consumer trends and create a compelling new blueprint for future growth and profitability."
The acquisition brings Loblaw and Shoppers Drug Mart within closer reach of more Canadians:
- 1 billion customer transactions per year
- More than 2,300 stores (corporate, franchised and associate-owned)
- Nearly 1,800 pharmacies
- 65 million sq. ft. of selling space
"I am very excited about our partnership with Loblaw, a company which also has a rich retail legacy of providing Canadians superior choice and value,” added Domenic Pilla, who remains president of Shoppers Drug Mart. “Together, we can learn from each company’s expertise to grow and create exciting opportunities for our two businesses and for Shoppers Drug Mart Associate-owners."
On a pro-forma basis in 2013, the combined company generated revenue in excess of $43 billion and EBITDA of approximately $3 billion. The combination of companies is expected to deliver targeted synergies of approximately $100 million in the first 12 months and approximately $300 million throughout a three-year period. 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.
Finish Line’s omnichannel strategy pays off in Q4
Finish Line chairman and CEO Glenn Lyon said the company’s successful execution of its consumer-centric omnichannel strategy drove solid gains in its core business and that growth initiatives contributed meaningfully to its record full-year revenue and profits.
The company reported net income of $42.75 million during the fourth quarter, up 28% from $33.47 million in the year-ago period. Net sales climbed 17% to $518.87 million from $442.68 million and same-store sales increased 6.3%.
“We have a clear vision for building on our strong market position through innovative product, superior service, and effective consumer engagements. With that vision and our strong team, we move forward optimistic about our near and long-term growth prospects,” said Lyon.
During the full fiscal year, net income rose 8% to $76.9 million from $71.47 million and net sales grew 16% to $1.67 billion from $1.44 billion. Same-store sales increased 4.2%
Looking ahead, Finish Line expects comparable store sales to be up mid-single digits and earnings per share to increase in the high single to low double-digit range from fiscal year 2014.
Safeway’s ‘go shop’ period has expired
It’s onto the next step for Safeway and Albertsons. No additional bidders emerged during Safeway’s 21-day “go shop” period following Albertsons’ announcement of its intention to acquire the company.
Under the definitive merger agreement, Safeway and its representatives were permitted to solicit and engage in negotiations with respect to alternative acquisition proposals during the 21-day period that ended March 27.
AB Acquisition, which is the owner of the Albertson’s and New Albertson’s supermarket chains, is owned by Cerberus Capital Management. AB Acquisition will acquire all outstanding shares of Safeway for $9.1 billion. The two companies will operate independently until the deal closes.
None of the parties that Safeway contacted during the “go-shop" period expressed interest in pursuing an alternative transaction under the merger agreement by the deadline. Safeway is now subject to customary "no shop" provisions that limit its ability to solicit alternative acquisition proposals from third parties or to provide confidential information to third parties.