Two of Canada's largest retailers agreed to incorporate their operations together. Reports revealed that Loblaw Companies Ltd. is acquiring Shoppers Drug Mart Corp. for CAD$12.4 billion in cash and stock.

The purchase will allow Shoppers Drug Mart to keep its brand name in place and allow it to function as separate division of Loblaw's, a representative of the companies said yesterday.

The deal also raised queries concerning the next big deal in Canada's fiercely pursued pharmacy retail industry. Just last month, Sobeys obtained the Canadian assets of another grocer, Safeway, for around CAD$5.8 billion in a transaction that involved almost 200 in-store pharmacies.

"With today's transformational partnership between Loblaw and Shoppers Drug Mart, we are changing the retail landscape in Canada," chairman of Loblaw, Galen Weston, said yesterday. "I've long believed that becoming a Canadian health and wellness, and nutrition, champion represented the most powerful next chapter for Loblaw."