Canada's biggest food retailer, Loblaw Cos Ltd., would purchase Shoppers Drug Mart Corp for Can$12.4 billion or US$11.9 billion. The purchase would transpire as it vies against Target Corp and Wal-Mart Stores Inc.

Loblaw said that purchasing Canada's largest pharmacy chain would allow it to create a retail giant. This would result to Can$42 billion income. Loblaw would also be allowed to gain access to the rising small-urban retail sector.

Loblaw offered Can$61.54 in cash and stake. This represented a premium of 27% to Shoppers Drug Mart's closing last Friday on the Toronto Stock Exchange. The stockholders of Shoppers Drug Mart would be given the choice to either obtain Can$61.54 in cash or 1.29417 Loblaw common stocks. The stocks would include Can$0.01 in cash for every stock held. The highest amount of cash that Loblaw would pay would be around Can$6.7 billion.

"With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace," Galen Weston, Loblaw's Executive Chairman, said.