Supermarket chain Safeway (NYSE:SWY) announced today that the Canada Competition Bureau has entered into a consent agreement with Sobeys, a Canadian food retailer and wholly owned subsidiary of Empire Company, allowing the previously announced sale of Safeway Canada to advance.
On June 12, Safeway said it was selling its Canadian assets for $5.8 billion Canadian in cash, or about $4.0 billion Canadian after taxes and expenses, plus the assumption of certain liabilities. The proceeds from this transaction are expected to be used to pay down $2.0 billion of debt, with the majority of the remainder to be used to buy back stock and some of the rest possibly used to invest in growth opportunities.
With regulatory approved gained, the two supermarket chains expect to close the transaction in early November, though as part of the consent agreement, Sobeys has agreed to divest 23 stores, 13 of which will be Canada Safeway stores and 10 will be Sobeys stores.
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