The Competition Bureau this morning approved the blockbuster merger of Loblaw and Shoppers Drug Mart. In its press release hailing the decision, Loblaw says it will close the deal on March 28. The new, combined company will have, by the bureau’s calculations, 2,738 grocery stores and 1,824 pharmacies in operation across Canada.
There are two main conditions the Competition Bureau imposed to the sale: Loblaw will have to sell 18 stores and 9 pharmacies to independent operators; and the bureau will monitor Loblaw’s interactions with suppliers for up to five years to try and prevent it from using its size to strong-arm suppliers. Here’s Commissioner John Pecman quoted in the bureau’s press release:
“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. The Bureau will continue to investigate Loblaw’s programs related to its relationship with suppliers to ensure that Canadian consumers benefit from vigorous competition.”
Here are the store and pharmacy locations that Loblaw will have to divest: