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Oct 3, 2017

Marijuana, Couche-Tard shares play a part in Coutu takeover: Metro CEO

We aim to deliver on cost savings after 3 years: Metro CEO on Jean Coutu takeover

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Metro’s CEO says the $4.5 billion cash and stock offer his company finalized for Jean Coutu puts the grocer in a prime position for a better foothold in the medical marijuana market when cannabis sales are finally regulated.

“I think pharmacy [is] well-positioned to provide medical marijuana, we’ll just have to see how provinces regulate distribution,” Eric LaFleche told BNN in an interview Tuesday. “There have been a few announcements, consultations and analysis. We will be looking for industry positions on that. We participated in those forums. It’s too early to tell, so we’ll just have to see where the dust settles and how distribution will be regulated by the provinces.”

“If pharmacies are allowed to participate we will, of course, participate.”

LaFleche said that the addition of Coutu’s foothold – in addition to the company’s existing partnerships with McMahon distribution and Brunet pharmacies – made sense from a diversification standpoint.

“It’s no secret that we wanted to grow on the pharmacy side of the business,” LaFleche said. “We think long-term it’s an attractive business from a demographic point-of-view and it’s a great combination with food as more people are trying to make healthier choices.”



As for the costs involved with the acquisition, LaFleche said the company identified $75 million in synergy savings over the next three years, including finding the best deals in product-buying between the two companies as well as amalgamating some distribution, franchising and administration staffing.

Part of that could come out of selling part or all of Metro’s stake in Alimentation Couche-Tard. LaFleche said the company will take proceeds from at least part of its holdings – 22 per cent of the company’s class ‘a’ shares – when the time is right.

“We will be using proceeds from Couche-Tard if and when the market [presents] the right opportunity for us. … We will take our time,” he said. “We have full financial flexibility, full financing commitments to close the transaction. So, we have time ahead of us.”

“We don’t have to sell all, we can sell some.”