Sobeys Makes Required Grocery Divestiture and Sells 7 More
Stores to Overwaitea
Further to the October 2013 Consent Agreement (the
"Agreement") entered into with Sobeys Inc.
("Sobeys") in connection with its $5.8 billion
acquisition of Canada Safeway Limited ("Safeway"), the
Competition Bureau (the "Bureau") has announced its
approval of the sale of 22 grocery stores to Overwaitea Food Group
LP ("Overwaitea") and Federated Co-Operatives Limited.
The Bureau also approved Overwaitea's acquisition of an
additional seven Sobeys stores that were not required to be
divested under the Agreement.
While it is entirely possible that Sobeys' sale of these
additional stores to Overwaitea may have simply flowed from the
negotiations regarding the sale of stores required to be divested
under the Agreement, it is also possible that Overwaitea was able
to benefit from its position as one of the limited number of
prospective purchasers acceptable to the Commissioner of
Competition for the stores required to be divested to facilitate
the acquisition of the additional seven stores (which appear
to complement the company's existing retail grocery
While the reasons behind the sale of the seven additional stores
are unclear, this transaction demonstrates the opportunity that
divestiture obligations can present for third parties – in
terms of both the acquisition of assets to be divested, as well as
the ability to potentially facilitate the acquisition of other
strategic assets beyond those required to be sold to obtain
approval under the Competition Act.
For a copy of the Bureau's press release, please click here.
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