LOBLAW, Canada’s largest food retailer, will buy Shoppers Drug Mart for C$12.4bn (£7.9bn), as it faces increasing competition from Target and Wal-Mart.
By acquiring Canada’s biggest pharmacy chain, Loblaw said it would create a retail giant with more than C$42bn in revenue and gain access to the growing small-urban store sector.
Big box retailers such as Target and Wal-Mart have been looking for ways to reach more customers in tighter urban locations. Target opened its first 24 Canadian stores in March and plans to have 124 stores in the country by the year-end.
“With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace,” Loblaw executive chairman Galen Weston said.
The Weston family owns the Selfridges department store and a big stake in Primark’s parent firm AB Foods.