Empire Company Ltd. has announced that its wholly owned subsidiary Sobeys will acquire Canada Safeway for $5.8 billion.
Sobeys will benefit from economies of scale and cost synergies as a result of the acquisition. Cost synergies will total approximately $200 million annually within three years.
Nova Scotia-based Sobeys has been operating for 106 years and is the number two grocery retailer in the country with annual revenues of $24 billion. With over 1,300 owned and franchised stores in all 10 provinces, Sobeys operates retail banners IGA, Foodland, FreshCo and Thrifty Foods.
Canada Safeway generated $6.7 billion in sales for the year ending March 23, 2013. Their owned real estate is valued at $1.8 billion. There are 213 stores across Western Canada totalling 9 million square feet in sought-after locations, and 60 percent of stores are located in Vancouver, Calgary, Edmonton and Winnipeg.
Sobeys will acquire 213 Safeway stores across Western Canada including 199 in-store pharmacies, 62 fuel stations, 10 liquor stores, 4 primary distribution centres and 12 manufacturing facilities.