Sobeys Snaps Up Safeway in Western Push
In a $5.8-billion deal that will reshape Canada’s grocery industry, Sobeys Inc. is buying Safeway Inc.’s Canadian division to beef up its western business and take on intensifying competition.
The deal, announced late Wednesday, will solidify Sobeys’ position as the country’s second-largest grocer and put pressure on Loblaw Cos. Ltd., the leading player in the sector, which has struggled to make gains over the past several years.
“The acquisition of Canada Safeway represents an excellent strategic fit, strengthening our presence in Western Canada,” said Paul Sobey, chief executive officer of Sobeys‘ parent company Empire Co. Ltd.
The agreement comes at a time of growing competition in food retailing as discount giant Wal-Mart Canada Corp. rapidly adds more grocery aisles to its stores and U.S. rival Target Corp. opens its first outlets in this country, raising the competitive stakes for everyone.