Competition Bureau approves sale of Loblaw, Shoppers stores to improve competition

OTTAWA – The Competition Bureau has approved the sale by Loblaw (TSX:L) of four retail outlets as part of its conditions for giving its blessing to the $12.4-billion acquisition of Shoppers Drug Mart.

The government agency says Loblaw No Frills stores in Elmira and Blenheim, Ont., will be sold to the Metro Inc. (TSX:MRU) grocery chain; and Shoppers outlets in Dalhousie and St. Stephen, N.B., will be sold to the Jean Coutu Group (TSX:PJC.A).

As well, nine pharmacies within Loblaw stores located in various town in Ontario and Newfoundland will be licensed to Remedy’s Rx.

The Competition Bureau approved the merger of Canada’s largest grocer with the country’s largest drug chain in March, but with conditions after expressing concerns about the level of remaining competition in 27 markets.

The bureau says the divesting process is ongoing and that Loblaw is still required to sell stores in the remaining 14 markets.

As part of the agreement, Loblaw must sell the remaining outlets to a new owner who will continue to operate the stores. Loblaw is not permitted to simply close the stores.