In 2013, Loblaw Companies Ltd. decided to acquire Shoppers Drug Mart, the chief executive of Loblaw contemplate the outcomes of this strategic direction. At the end of 2012, Loblaw strengthened its shareholders’ confidence by announcing a real estate investment’s establishment, where at first the company would transfer around 75% of its significant real estate holdings. In the meantime, the shares of Shoppers have marked a dramatic increased in its value. Along with this, the entrance of online retailers and big box stores like Target and Wal-Mart in Canada have caused the intense competition in the market. The regularities also created an impact on pharmaceutical companies, when they passed new regulations to minimize the price of drugs. From the past six years, it was the time that the shares of Loblaw were trading at an attractive valuation, thus it was an appropriate time to use this opportunity to make an acquisition that is expected to yield $300 million per year. Would it better right now for the company to follow this strategic option? Whether it has the strategic outcomes? And if so, what should be the appropriate bid for Shoppers by Loblaw?
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