Canada-based pharmacy retailing firm Jean Coutu Group has announced approval from the majority of its shareholders for its combination with food and pharmaceutical distribution company Metro.
The firms originally signed a definitive combination agreement in October, under which Metro would acquire all outstanding shares of Jean Coutu for a total of $4.5bn.
Through the deal, Metro is set to strengthen its footprint, operational efficiency and growth potential with the addition of more than 400 drugstores and a distribution centre.
Upon completion of the transaction, Metro plans to operate Jean Coutu, as well as its own pharmacy distribution and franchising activities as a new wholly owned subsidiary.
The combined entity is estimated to include an overall network of more than 1,300 stores across the country.
It is expected to generate $16bn in revenues, $500m free cash flow and $75m in synergies in three years.
Jean Coutu Group’s board of directors chairman Jean Coutu said: “Our valued shareholders have overwhelmingly supported the Metro transaction.
“This strong support for the transaction shows that our shareholders understand the benefits they will receive as a result of this transaction, either by realising their investment or participating in the new combined entity, which is set to be a Canadian leader in the grocery and pharmaceutical industries.”
The deal is scheduled to complete next year and remains subject to approval from the Competition Bureau, the Toronto Stock Exchange, and the satisfaction or waiver of additional customary closing conditions.