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 network).
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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