Trade-Off: Sobeys Gains Approval for Safeway Acquisition

Sobeys must divest 23 stores in Western Canada, but that’s a worthwhile trade-off for this acquisition to go through.

| More on:
The Motley Fool

By Cameron Conway

The Federal Competition Bureau announced yesterday that it has reached a Consent Agreement with Empire (TSX:EMP.A) subsidiary Sobeys regarding its proposed acquisition of Canada Safeway (NYSE:SWY).

In a statement, Sobeys President & CEO Marc Poulin said, “We are delighted to have received regulatory clearance from the Competition Bureau. Our focus now turns to closing the deal, which we expect to do in early November, and beginning to serve our customers in Western Canada as one company.”

The locations that are on the block are a mix from both companies. They include Sobeys, Safeway, IGA, Thrifty Foods, and Price Chopper locations around Manitoba, Saskatchewan, Albert and B.C. (Note: The full list of closures is included in the Sobeys press release here.) Once these 23 stores hit the market, it’s expected that major players such as Loblaws and Overwaitea Food Group may be interested — which would affirm the beliefs of John Pecman, Commissioner of Competition, who wants competitive prices for Canadian grocery consumers.

Yesterday’s news should relieve anxious investors waiting for this acquisition to close. And this announcement should also give closure to consumers loyal to either company, left wondering which side of the street they’ll need to go for their groceries.

More from The Motley Fool
Interested in the top small-cap stock idea from The Motley Fool’s senior investment advisor? Click here to download a FREE copy of “A Top Canadian Small Cap for 2013 — and Beyond.”

Cameron Conway does not own shares of any companies mentioned.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

TFSA and coins

TFSA Investors: 3 Incredible Stocks for 2024

Are you looking for stocks to buy and hold for years for your TFSA? These three stocks could deliver exceptional…

Read more »

A person looks at data on a screen
Stocks for Beginners

3 Warren Buffett Stocks to Hold Forever

Warren Buffett sold some shares in Apple (NASDAQ:AAPL), and the market had questions.

Read more »

Dividend Stocks

Golden Years Gain: Your CPP Benefits at Age 70

CPP users delaying pension payments until 70 will receive substantial monthly income streams in the golden years.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

3 Dividend Stocks You Can Safely Hold for Decades

Top TSX dividend stocks are on sale.

Read more »

A bull outlined against a field

After Earnings, I’m Bullish on These 2 TSX Stocks

Given their solid performances and healthy growth prospects, I am bullish on these two TSX stocks.

Read more »

Woman has an idea
Bank Stocks

3 No Brainer Bank Stocks to Buy Now for Less Than $1,000

Canadian bank stocks like Toronto-Dominion Bank (TSX:TD) appear quite cheap today.

Read more »

Dividend Stocks

Where Will Canadian Utilities Stock Be in 5 Years?

Canadian Utilities (TSX:CSU) is a classic example of a stock where the dividend is all you get. Can the company…

Read more »

Man holding magnifying glass over a document
Dividend Stocks

2 Stocks I’m Watching for Big Passive Income

Consider Bank of Nova Scotia (TSX:BNS) and another top passive-income play to power your dividend portfolio!

Read more »