Metro, Jean Coutu enter $4.5B understanding to mix grocery, pharmacy chains

Two of a biggest sell names in Quebec have assimilated army in a $4.5-billion understanding they contend will make them a personality in food, pharmacy, health and beauty.

Grocery sequence Metro Inc. has done a grave offer to take over Jean Coutu pharmacy organisation after disdainful negotiations between a dual retailers.

Shareholders of Jean Coutu are being offering a multiple of money and shares value about $24.50 per share. Three-quarters of a payout or $3.2 billion will be in money and 25 per cent in Metro shares, creation Jean Coutu shareholders 11 per cent owners of Metro.

Metro has some-more than 850 food and pharmacy stores in Quebec and Ontario, while Jean Coutu has 419 pharmacies in Quebec, Ontario and New Brunswick.

Together, including their authorization operations, they occupy 86,000 people and are a largest private zone employer in Quebec, according to Metro arch executive officer Eric La Flèche.

Jean Coutu Group CEO François Coutu will continue to run a pharmacy group. (Graham Hughes/Canadian Press)

Jean Coutu will take over Metro’s pharmacy operations over a subsequent 3 years, though will continue to work as a apart division, headed by François Coutu, son of a association founder.

In a discussion call with analysts, La Flèche pronounced a partnership is an event to benefit on consumer trends focusing on health and wellness.

“Consumers of all ages are focused on health and what they eat,” he said.

He forecasts $75 million in synergies between a dual operations over a subsequent 3 years, including common warehousing, an stretched online participation and eventually cross-selling of products.

Grocery attention competition

The dual companies have had an eye on converging in a sell sector, including Loblaw’s squeeze of Shoppers Drug Mart in 2013, as good as a attainment of new competitors, such as Amazon and Walmart.

“This was a best event for Metro to benefit scale in Canada,” La Flèche said.

Metro operates grocery stores underneath several banners, including Metro, Metro Plus, Super C and Food Basics, as good as some-more than 250 drugstores underneath a Brunet, Metro Pharmacy and Drug Basics banners.

It has done several takeovers in a past 12 years, including AP Canada and racial food tradesman Marché Adonis as good as a share of Alimentation Couche-Tard

La Flèche pronounced Metro saw Jean Coutu as an “iconic brand,” famous and devoted in Quebec, with state-of-the-art medication technology, a and with Canada’s aging population.

• Why Metro’s squeeze of Jean Coutu took years to happen
• Loblaw’s Shoppers Drug Mart bid escalates grocery wars

“It’s a singular item and clearly value a cost we paid,” he said.

$16B in annual revenues

The transaction requires regulatory approvals and support from two-thirds of a votes expel by Jean Coutu Group shareholders during a special assembly to be hold in November.

The companies announced final week that they were in “exclusive discussions” toward a understanding to emanate a grocery-pharmacy organisation with some-more than 1,300 stores — in Quebec, Ontario and New Brunswick.

The total association will have about $16 billion in annual revenues and $500 million in giveaway money flow.

Metro shares fell 1.5 per cent in trading, station during $42.25 during midday. Jean Coutu shares rose 1.5 per cent to $24.58 a share.

Article source: http://www.cbc.ca/news/business/metro-jean-coutu-deal-formalized-1.4316155?cmp=rss