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Shoppers Drug Mart Case Study

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Shoppers Drug Mart is one of the biggest retail drug stores in Canada, founded in 1962 by Murray Koffler. The first Shoppers Drug Mart opened up in Toronto, Ontario and over the past 50 years it has continued to evolve into what it is today. There are now more than 1307 Shoppers Drug Mart’s across Canada making it Canada’s leading drug retailer. In the summer of 2013, Loblaw Companies proposed a $12.4 billion dollar deal (cash and stocks) to acquire Shoppers Drug Mart. The deal was approved and completed by both shareholders and the competition bureau on March 28st, 2014, joining two of Canada’s biggest retailers. Shoppers drug Mart's chairman, Holger Kluge, and Loblaw Companies Ltd. chairman, Galen Weston, have known eachother for quite a…show more content…
If shareholders were to choose the second option, their stock would be worth $72.59 (Friday March 24, 2017) today. The government wasn’t heavily involved in this merger, but Loblaw does have to follow some guidelines. The government agency stated that Loblaw must sell 18 stores, and at least 9 pharmacies to an independent operator. Loblaw will also have other behavioural restrictions placed on them for up to 5 years. This is to prevent Loblaw from forcing its suppliers to offer goods to them at much lower prices. The competition bureau says that without this in place, Loblaw would likely be increasing prices while decreasing service. Some suppliers have even called out Loblaw for using unfair practices throughout the years. As for now, Loblaw is doing extremely well. The Shoppers Drug Mart deal has benefited Loblaw extensively, helping Loblaw more than double their profit. Loblaw has seen strong sales over the past couple of years, especially in Shoppers Drug Mart stores. Loblaw stocks are also high; the stock rose from $47.03 in 2014, to $72.59 in 2017, showing undoubtedly that the merger has benefited
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