Competition Bureau approves sale of 10 Shoppers Drug Mart locations

TORONTO – The Competition Bureau has given a green light for the sale of 10 Shoppers Drug Mart locations.

The sale partially fulfills a condition of Loblaw’s purchase of Shoppers Drug Mart, a $12.4-billion deal that combines the country’s largest grocery and pharmacy businesses.

The bureau identified competition concerns in 27 markets where Loblaw and Shoppers Drug Mart were both present.

The national agency says seven of the 10 locations approved for sale will be to independent pharmacists operating under the McKesson banner. The other three Shoppers locations will be sold to Pharmasave Drugs in Atlantic Canada.

The Shoppers Drug Mart stores to be sold are in Ontario, Alberta, Nova Scotia and Prince Edward Island.

Loblaw (TSX:L) still needs to sell four other locations to gain the approval. It has previouly sold 14 stores and nine in-store pharmacies.

“Competition generally leads to lower prices for consumers, as well as more consumer choice, a wider range of service options and increased innovation,” the regulator said in a statement.

McKesson works with 7,000 independent pharmacies that operate under the IDA, Guardian, Proxim, Medicine Shoppe, Associated Retail Pharmacy and Family Health Care Pharmacy. Pharmasave Drugs Ltd. operates more than 500 member pharmacies across Canada.

In addition to Shoppers Drug Mart, its main grocery store business and several other grocery banners, Loblaw also operates the clothing line Joe Fresh, real estate trust Choice Properties and financial services division President’s Choice Financial.