Acquisition strengthens Loblaw and Shoppers Drug Mart in competitive
marketplace. Will deliver more choice, value and convenience to help
Canadians Live Life Well

• Complementary offerings of Canada’s #1 food retailer and Canada’s #1
  pharmacy and beauty retailer
• Convenient retail locations and unmatched store formats to reach more
  Canadians where they live and work
• Canada’s leading private label brands

BRAMPTON, ON, March 28, 2014 /CNW/ – Loblaw Companies Limited (TSX: L)
(“Loblaw”) today announced that it has completed its acquisition of
Shoppers Drug Mart Corporation (“Shoppers Drug Mart”), which is now a
unique and separate operating division of Loblaw.

“The most successful partnerships are grounded in strengths that
complement each other,” said Galen G. Weston, Executive Chairman,
Loblaw Companies Limited. “Loblaw and Shoppers Drug Mart are perfect
partners. We will drive growth and profitability through our unmatched
mix of store formats, products and offerings. This is truly a case of
the whole being greater than the sum of its parts.”

The acquisition brings together two iconic Canadian brands and harnesses
the complementary strengths of the nation’s number-one grocery retailer
and number-one pharmacy and beauty retailer. It strengthens both
companies’ competitiveness in an evolving retail landscape, creating
new growth opportunities for shareholders. It will give consumers more
choice, value and convenience through Canada’s largest retail network
of unmatched store formats, including Shoppers Drug Mart’s important
and growing footprint in the small-urban store sector.

The acquisition brings Loblaw and Shoppers Drug Mart within closer reach
of more Canadians:

• 1 billion customer transactions per year
• More than 2,300 stores (corporate, franchised and Associate-owned)
• Nearly 1,800 pharmacies
• 65 million square feet of selling space

Compelling Blueprint to Drive Growth and Profitability

“Consumers are more focused on health and wellness and they are
demanding more convenient retail locations,” said Vicente Trius,
President, Loblaw Companies Limited. “Working together, we will
capitalize on these consumer trends and create a compelling new
blueprint for future growth and profitability.”

Domenic Pilla, who remains President of Shoppers Drug Mart, said: “I am
very excited about our partnership with Loblaw, a company which also
has a rich retail legacy of providing Canadians superior choice and
value. Together, we can learn from each company’s expertise to grow and
create exciting opportunities for our two businesses and for Shoppers
Drug Mart Associate-owners.”

On a pro-forma basis in 2013, the combined company generated revenue in
excess of $43 billion and EBITDA of approximately $3 billion*. The
combination of companies is expected to deliver targeted synergies of
approximately $100 million in the first twelve months and approximately
$300 million over three years. First-year synergies are expected to
come from the cost of goods sold and purchasing efficiencies in goods
not for resale. Planned synergies are not dependent on any store
closings.

Shareholder Consideration

As holders of Shoppers Drug Mart common shares elected to receive in the
aggregate more cash consideration than the maximum aggregate cash
consideration of approximately $6.6 billion payable by Loblaw under the
arrangement, each holder of Shoppers Drug Mart common shares who
elected to receive cash consideration will receive, for each Shoppers
Drug Mart common share held, approximately $49.22 in cash (representing
$61.54 multiplied by a pro-ration factor of 0.799747) and approximately
0.2592 Loblaw common shares. Holders of Shoppers Drug Mart common
shares who failed to properly make an election or did not make an
election prior to the election deadline of 5pm on March 26, 2014, will
receive, for each Shoppers Drug Mart common share held, approximately
$26.53 in cash and approximately 0.7363 Loblaw common shares. No
fractional shares will be issued and Loblaw will pay-out fractional
shares in cash.

Loblaw Companies Limited is Canada’s food and pharmacy leader, the nation’s largest retailer,
and the majority unitholder of Choice Properties Real Estate Investment
Trust. Loblaw provides Canadians with grocery, pharmacy, health and
beauty, apparel, general merchandise, banking, and wireless mobile
products and services. With more than 2,300 corporate, franchised and
Associate-owned locations, Loblaw, its franchisees, and
Associate-owners employ approximately 192,000 full- and part-time
employees, making it one of Canada’s largest private sector employers.

Loblaw’s purpose – Live Life Well – puts first the needs and well-being of Canadians who make one billion
transactions annually in the companies’ stores. Loblaw is positioned to
meet and exceed those needs in many ways: convenient locations; more
than 1,050 grocery stores that span the value spectrum from discount to
specialty; full-service pharmacies at more than 1,250 Shoppers Drug
Mart and Pharmaprix locations and more than 500 Loblaw locations;
no-fee banking with PC Financial; affordable Joe Fresh fashion and
family apparel; and three of Canada’s top consumer brands in Life
Brand, noname and President’s Choice. Through the PC Plus™ and
Shoppers Optimum loyalty programs, more than one in every three
Canadians are rewarded for shopping with the companies.

For more information, visit Loblaw’s website at www.loblaw.ca and Loblaw’s issuer profile at www.sedar.com.

Forward-Looking Statements
Certain statements in this news release are forward-looking information
within the meaning of applicable securities legislation including, but
not limited to, statements relating to certain strategic benefits
expected to result from the transaction. Forward-looking information is
based on a number of assumptions and is subject to a number of risks
and uncertainties, many of which are beyond Loblaw’s control, that
could cause actual results and events to differ materially from those
that are disclosed in or implied by such forward-looking
information. There can be no assurance that the anticipated strategic
benefits and operational, competitive and cost synergies will be
realized. Loblaw does not undertake any obligation to update such
forward-looking information, whether as a result of new information,
future events or otherwise, except as expressly required by applicable
law.

*EBITDA is a non-GAAP financial measure, defined as earnings before
income taxes, net interest expense and other financing charges and
depreciation and amortization. Loblaw and Shoppers Drug Mart believe
this non-GAAP financial measure provides useful information to both
management and investors in measuring financial performance. This
measure does not have a standard meaning prescribed by GAAP and
therefore may not be comparable to similarly titled measures presented
by other publicly traded companies, and should not be construed as an
alternative to other financial measures determined in accordance with
GAAP.

SOURCE Loblaw Companies Limited