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Sobey’s to sell 30 Canadian stores for $391 million

Stellarton, Canada — Sobey’s Inc. has entered binding purchase and sale agreements with Overwaitea Food Group and Federated Co-operatives Limited that will see Sobeys sell 22 of the 23 stores it is required to divest as part of its consent agreement with the Competition Bureau related to its purchase of Canada Safeway.

 In addition, Sobeys has signed a binding letter of intent with Federated for the sale of its Price Chopper location in Winnipeg, which the company is also required to divest as part of its October consent agreement.

Through the negotiation of these transactions, Sobeys also agreed to include an additional seven stores in British Columbia in the package to be acquired by Overwaitea. This was done to create a divestiture package that meets the needs of both Sobeys and Overwaitea.

Proceeds of about $391 million will be used to repay bank debt. The total annual sales from these stores are approximately $627 million. Both agreements have received approval from the Competition Bureau and Sobeys anticipates the deals will close in March or early April 2014. The sale of the Price Chopper location remains subject to finalization of an asset purchase agreement with the purchaser and approval from the Competition Bureau.

 

 

© 2014