Metro Inc., the Montreal-based grocery chain, is in advanced negotiations to buy drugstore counterpart Jean Coutu Group, the companies announced.
Metro said it was proposing to buy Coutu at a price of $24.50 (Canadian) per share, or a total consideration of about $4.5 billion (Canadian), to be paid in a combination of 75% cash and 25% Metro shares.
The price was established in the course of negotiations between the parties preceding the execution of a non-binding letter of intent dated August 22, 2017. The Coutu family has indicated its intention to support the proposed transaction. The companies declined further comment.
If completed the deal would get Metro more than 400 drug stores in Quebec, Ontario and New Brunswick. Metro currently operates more than 250 drugstores.
Metro rival Loblaw in 2013 acquired Shoppers Drug Mart in an $11.9 acquisition in a deal Loblaw officials said helped it to capitalize on the health and wellness trend while adding scale and diversification to better withstand competition intrusions.