Two of Quebec’s iconic retail brands are planning to merge with Metro Inc.’s $Four.5-billion takeover supply for the Jean Coutu pharmacy group.
Shareholders of Jean Coutu (TSX:PJC.A) are being provided a mixture of money and shares value about $24.50 per share. Three-quarters of the payout or $three.2 billion can be in money and 25 per cent in Metro shares.
Quebec’s second-largest pharmacy community will function as a separate division of the grocery firm, headed by Francois Coutu, son of the corporate founder.
Jean Coutu shareholders would personal 11 per cent of Metro (TSX:MRU) and the pharmacy chain will appoint two board members.
READ MORE: Metro eyes doable merger with Quebec-based pharmacy chain Jean Coutu Group
The chairman and firm namesake mentioned the mix will safeguard’s Jean Coutu Group’s entrepreneurial imaginative and prescient and permit it to develop.
“Bringing together our two highly-respected and long-standing Quebec brands represents an exciting milestone in the history of the Jean Coutu Group,” said Jean Coutu.
Metro chief government Eric La Fleche mentioned the grocery chain intends to construct on the Jean Coutu model’s legacy.
“It is a unique opportunity to bring together each company’s expertise to better serve the growing consumer demand for healthier choices, value and convenience,” he mentioned in a information launch.
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The takeover follows Loblaw Companies Ltd.’s (TSX:L) $12.Four-billion cash-and-stock deal in 2014 of Shoppers Drug Mart, which operates as Pharmaprix in Quebec.
Canadian grocery store chains are beefing up as they compete in opposition to Wal-Mart, Costco and Amazon’s entry in the grocery area with its buy of Whole Foods.
The firms introduced final week that they had been in “exclusive discussions” in direction of a deal to create a grocery-pharmacy group with greater than 1,300 shops in Quebec, Ontario and New Brunswick.
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The mixed firm may have about $16 billion in annual revenues and $500 million in free money move, together with $75 million in value financial savings inside three years.
The transaction requires regulatory approvals and assist from two-thirds of the votes solid by Jean Coutu Group shareholders at a particular assembly to be held in November. The deal is predicted to shut in the primary half of 2018.
The Coutu household and affiliated entities which maintain 93 per cent of voting rights, together with firm administrators and senior officers, have agreed to vote in favour of the deal.
Metro mentioned it would promote undisclosed belongings. Irene Nattel of RBC Capital Markets mentioned a key excellent query is whether or not the corporate will promote its 32.2 million shares of Alimentation Couche-Tard (TSX:ATD.B).