Federated Co-op Ltd. will buy 14 food stores from Sobeys Inc., including four with gas bars.
The agreement includes four stores in Edmonton, four in Winnipeg and one each in Saskatoon, Regina, Taber, Leduc, Wetaskiwin and Fort Saskatchewan.
“This transaction raises the profile of Co-op in Western Canada,” FCL chief executive officer Scott Banda said in a Feb. 14 news conference.
The deal is expected to close by the end of March with a staged brand transitional process for each store between April and May.
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Banda said the transaction involves 1,300 employees, about 100 per store.
“All the employees that work at these facilities today we want and will be keeping them on,” Banda said.
“They will be transferring over to our team. They get to change uniforms but other than that we anticipate high level of customer service, and if you have your favourite clerk, they still should be there the next day.”
The federal Competition Bureau required Sobey’s to sell some of its stores in Western Canada following its purchase of Canada Safeway last year. Banda said FCL had no choice over which Sobey’s locations to buy.
“From their perspective, they put a package together that (they) presented to us. We really didn’t have a say on what the package contained. It was more, ‘do you want it or not?’ ” he said.
Acquiring the stores in Edmonton and Winnipeg was important to making the purchase.
“The foothold in Edmonton and Winnipeg is absolutely critical in this transaction. That is the most strategic, important part of it,” Banda said.
He said a solid Co-op membership exists in both major cities, but there is no food presence.
“Our goal is to transition those into Co-op members,” he said.
“The chance to buy existing facilities with quality employees that can step up and operate basically seamlessly is an enormous, enormous opportunity for our organization.”
Banda said the price tag for the deal is not being disclosed at this point, pending an inventory review.
