MONTREAL — Metro here said last week it has reached an agreement with Groupe GP to acquire Les Supermarches GP, St.-Anne-de-Monts, Quebec, for an undisclosed amount of cash.
The deal includes 15 supermarkets in eastern Quebec, including Quebec City, with annual sales of $272 million (U.S.). It is expected to close later this month.
It will be Metro's first acquisition since it bought 236 A&P stores in 2005.
While Metro is looking for growth opportunities for its supermarkets and pharmacies close to its base in Quebec and Ontario, it is also interested in doing business in Western Canada, where the Canadian division of Safeway and British Columbia-based Overwaitea operate, Roberto Sbrugera, senior director, treasury and investor relations, told SN.
While there are no indications either operator is interested in selling any of its stores, “we worked on the A&P deal for seven years, so you have to be patient on larger transactions,” Sbrugera pointed out.
Of the 15 stores Metro is acquiring from Groupe GP, eight operate under the Metro or Metro Plus banner and seven under the GP banner. Both are conventional formats, though the GP stores are a bit smaller than the 36,000-square-foot average of the other units.
The stores are currently independent customers that use Metro as their wholesaler, Sbrugera noted. “When they went up for sale, it became a question of whether we would keep that volume or not,” he explained.
Metro operates nearly 600 grocery stores and 250 pharmacies in Quebec and Ontario. The transaction will boost its total sales to approximately $10.3 billion U.S.
Eric R. Le Fleche, president and chief executive officer of Metro, said the pending acquisition will strengthen the company's presence in eastern Quebec.
Guy Pelletier, president and CEO of Groupe GP, said his company's partnership with Metro dates back over 40 years, “and we feel Metro's steady growth and solid track record make it the best choice to maintain our stores' growth and development.”
Sbrugera said management and store personnel will not change once the deal is completed, though the GP stores may eventually be converted to the Metro banner.