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Loblaw expands into Asian food market, acquires T&T

Published: 18:54 24 Jul 2009 BST

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Canada’s largest food distributor Loblaw Companies Limited (TSX: L) is set to expand into the Asian food market after striking a deal to acquire T&T Supermarket Inc, Canada’s largest distributor of Asian Food.  The company said it has reached an agreement with T&T’s shareholders to purchase all of T&T’s common shares.

 

The deal is worth USD 225 million, USD 191 of which will be paid in cash and the rest in T&T’s preferred shares, their value in close correlation with the future performance of the business.

 

“T&T's talented management team and colleagues have developed what we believe are the best Asian stores in Canada, which will be used to help Loblaw extend its ethnic offering to better serve Canada's largest growing customer segment,” said Loblaw Executive Chairman Galen G. Weston.
T&T will now operate as a separate division of Loblaw.

 

The transaction still needs to get regulatory approval and is expected to be closed by the end of the year. T&T’s sales in the year ended June 30 amounted to USD 514 million.

 

Loblaw closed Thursday with a 0.7% gain on the Toronto Stock Market. The acquisition is expected o be accretive to Loblaw earnings in the first year following closing.

 

Loblaw today announced an increase in profits for Q2 and reported a 2.8% year on year hike in revenue, but foresaw a challenging second half of the year.

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