11-4-13 11:17 AM EST | Email Article

Sobeys completes purchase of Canada Safeway

Canada NewsWire

STELLARTON, NS, Nov. 4, 2013 /CNW/ - Empire Company Limited (TSX: EMP.A) and its wholly-owned subsidiary Sobeys Inc. today announced that Sobeys has completed its purchase of  substantially all of the assets of Canada Safeway in accordance with the asset purchase agreement announced on June 12, 2013 and the consent agreement with the Competition Bureau announced on October 22, 2013.

"This is a great day in the 106-year history of Sobeys," said Paul D. Sobey, President & Chief Executive Officer, Empire Company Limited.  "The addition of Canada Safeway represents a unique and highly strategic opportunity to leverage Sobeys' modern asset base and provides us with a new and exciting platform for growth as we move forward."

Marc Poulin, President & Chief Executive Officer, Sobeys Inc. added: "We welcome the 29,000 Safeway employees to the Sobeys team as we move forward together as one company, excited to serve the food shopping needs of consumers in Western Canada."

Sobeys funded the CDN $5.8 billion purchase price through application of proceeds from the following:

  • $1.85 billion from Empire primarily from Empire's equity issue completed in July, 2013;
  • $989 million net proceeds from Sobeys' bond offering completed in August, 2013;
  • $991 million from the disposition of 70 Canada Safeway properties to Crombie REIT; and
  • $1.97 billion in bank credit facilities and cash on hand.

As a result of the completion of the acquisition of Canada Safeway assets, each outstanding subscription receipt of Empire has been automatically exchanged for one Class A non-voting share of Empire and a cash dividend-equivalent payment of CDN. $0.26 (being equal to the aggregate amount of dividends declared per Class A share for which record dates have occurred since the issuance of the subscription receipts), less any applicable withholding taxes. Empire expects that the subscription receipts will be delisted from the Toronto Stock Exchange after the close of markets today and that the Class A shares issued in exchange for the subscription receipts will immediately commence trading on the Toronto Stock Exchange. Empire further expects that holders of subscription receipts will receive in the upcoming days the Class A shares and the dividend equivalent payment to which they are entitled.  Further information regarding the acquisition and the exchange of the subscription receipts is available under Empire's issuer profile at www.sedar.com.

About Empire Company Limited
Empire Company Limited (TSX: EMP.A) is a Canadian company headquartered in Stellarton, Nova Scotia.  Empire's key businesses include food retailing and related real estate. With pro forma annual sales of approximately $24 billion and assets of approximately $12.5 billion, Empire and its subsidiaries, including franchisees and affiliates, employ more than 124,000 people.

About Sobeys Inc.
Proudly Canadian, with headquarters in Stellarton, Nova Scotia, Sobeys has been serving the food shopping needs of Canadians for 106 years. A wholly-owned subsidiary of Empire Company Limited (TSX:EMP.A), Sobeys owns or franchises more than 1,500 stores in all 10 provinces under retail banners that include Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, and Lawton's Drug Stores as well as more than 330 retail fuel locations. Sobeys and its franchise affiliates employ more than 124,000 people. The company's goal is to be widely recognized as the best food retailer and workplace environment in Canada. More information on Sobeys Inc. can be found at www.sobeyscorporate.com.

This news release contains forward-looking information reflecting management's expectations regarding pro forma information and the exchange of subscription receipts for Class A shares. The forward-looking statements in this news release are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from current expectations. No assurance can be given that pro forma information will reflect future financial performance or position which may be impacted by future acquisitions or dispositions and market conditions.  The Company does not undertake to update any forward-looking statements that may be made from time to time by them or on their behalf other than as required by applicable securities laws.

SOURCE SOBEYS INC.

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