As you have already likely heard, Loblaw’s has agreed to buy Shoppers Drug Mart for more than $12b. This is actually a seemingly smart acquisition for so many reasons. The loyalty programs that both companies have. The ability to attract different customers to the various stores and leverage their strengths. The securing of Loblaw’s as a force to compete against Target and Walmart. Yes, this deal makes a lot of sense on paper.
Hopefully Loblaw’s will be able to make the integration work. They have said it will take 6-7 months and that customers will see no difference and that all employees will keep their jobs. I hope that is the case. This is a very complex acquisition and it might just be easier for Loblaw’s to keep Shoppers running as a separate division, as it has proposed.
This changes the Canadian retail landscape once again as we see additional consolidation in the grocery industry. As you may remember, only a few short weeks ago, Sobey’s parent company Empire agreed to buy Safeway. So the big get bigger. This is great if you are a supporter of Canadian businesses.
Another interesting angle…think how many service providers, consultants, lawyers, etc., will be lining up to try and get a piece of the acquisition pie. No doubt there will be money available for “integration” of the two companies.
I wish them all the best as I hope this turns out to be as good a move for both organizations as it appears to be on paper.