METRO INC. and The Jean Coutu Group (PJC) Inc. have entered into a definitive combination agreement pursuant to which METRO will acquire all of the outstanding Jean Coutu Group Class A subordinate voting shares and all of the outstanding Jean Coutu Group Class B shares for $24.50 per Jean Coutu Group Share, representing a total consideration of approximately $4.5 billion, subject to regulatory and Jean Coutu Group shareholder approvals.
Under the terms of the Transaction, Jean Coutu Group shareholders will receive an aggregate consideration which will consist of 75% in cash and 25% in METRO common shares. The price of $24.50 per Jean Coutu Group Share implies a premium of 15.4% to the volume weighted average price of the Class A subordinated voting shares of the Jean Coutu Group for the 20 trading days ending August 21, 20 17 (the day prior to the execution of a non-binding letter of intent between METRO and the Jean Coutu Group).
"Bringing together our two highly-respected and longstanding Québec brands represents an exciting milestone in the history of the Jean Coutu Group", said Mr. Jean Coutu, Chairman of the Jean Coutu Group. "I am confident that this combination will ensure the safeguard of our entrepreneurial vision and corporate values as well as the perennial strength of the brand and will enable us to pursue our growth plan."
"We're honored to become the steward of the iconic Jean Coutu Group brand and we intend to build on this exceptional legacy," said Mr. Eric R. La Flèche, President and Chief Executive Officer of METRO. "This transaction is attractive and compelling from a financial and commercial perspective. It is a unique opportunity to bring together each company's expertise to better serve the growing consumer demand for healthier choices, value and convenience. The Jean Coutu Group's extensive retail network and state-of-the-art distribution center will provide us with increased scale and reach, operational efficiencies and enhanced growth potential. We look forward to having Jean Coutu Group shareholders become important METRO shareholders."
Mr. François J. Coutu, President and Chief Executive Officer of the Jean Coutu Group, said: "The strategic and commercial fit between the two companies and their retail networks represents an opportunity for continued growth; it will consolidate our position as the leading destination for professional services, health, beauty and wellness with a network comprised of more than 675 independent stores. This transaction also represents an opportunity for our shareholders to realize significant and immediate value while providing them the opportunity to participate in the future upside through continued ownership in the combined entity."