Benefits and drawbacks for each one of businesses

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In June 2013, Shoppers Drug Mart, Canada's biggest pharmacy chain merged with Loblaw, Canada's largest grocery retailer, in a 12.4 billion dollar deal. Rather than cutting into each other's market share, the deal allows the two companies to play on each other's strengths. Shoppers has about $1 billion in food sales annually, versus Loblaw's $30 billion. But Loblaw's share of the pharmacy market is only five per cent, so adding Shoppers health products and services to Loblaw grocery stores allows the food retailer to expand its services in what it sees as a growing sector: health, wellness and nutrition.

Questions

1. Why is this case considered a merger? Explain your answer.

2. What type of merger is this case? Justify your answer.

3. What were the benefits and drawbacks for each one of the businesses?

Reference no: EM133389440

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