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Competition Bureau won't oppose Cara's $537-million takeover of St-Hubert

OTTAWA – The Competition Bureau says it will not oppose the $537-million sale of Montreal-based St-Hubert restaurants to Ontario’s Cara Operations Ltd., owner of Swiss Chalet among other brands, despite concerns raised in Quebec.

The federal agency said it doesn’t believe the transaction is likely cause a substantial reduction of competition.

St-Hubert operates 117 restaurants, mainly across Quebec, plus two food manufacturing plants and two distribution centres.

Its food manufacturing business sells to corporate customers such as Sobeys, Loblaws, Costco and Metro, along with the mostly franchised St-Hubert restaurants.

Former Parti Quebecois leader Pierre Karl Peladeau has called the proposed sale “a sad day for Quebec,” blaming the provincial Liberal government for not doing enough to prevent takeovers of Quebec companies by external interests.

His remarks followed the sale of hardware chain Rona to U.S.-based Lowe’s that is set to close Friday, and the earlier purchase of the famed Cirque du Soleil by a U.S. private equity firm.

Cara (TSX:CAO), whose brands also include Harvey’s, Milestones, Montana’s, Kelsey’s, East Side Mario’s and New York Fries, said the St-Hubert team will decide whether to join with Harvey’s, for example, in combo-stores.

Cara says it is Canada’s third-largest restaurant business after Restaurant Brands International, the company behind Tim Hortons and Burger King, and McDonald’s, with 1,010 franchised and corporate restaurants, including 37 outside Canada.