Loblaw Companies Limited agreed to sell 18 retail stores and 9 pharmacies, as well as to abide by certain behavioural restrictions, in order to receive Competition Bureau approval of its acquisition of Shoppers Drug Mart Corporation. Loblaw entered into a consent agreement with the Bureau on March 21, following the Bureau’s review of the proposed acquisition.
During the merger review process, the Bureau concluded that the proposed transaction would likely lead to a substantial lessening or prevention of competition in the retail sale of pharmacy products and drugstore-type merchandise in Canada. The Bureau determined that without a consent agreement, the proposed acquisition would likely have led to increased prices.
The Bureau also had concerns with certain conduct by Loblaw with respect to its suppliers. In order to address these concerns, the Consent Agreement contains behavioural restrictions on certain Loblaw programs and agreements on the supply of products for retail sale lasting as long as five years from the date of closing the proposed transaction.