Sobeys Acquires Safeway

Empire Company Limited and its wholly owned subsidiary Sobeys Inc. completed its acquisition of substantially all of the assets of Canada Safeway for $5.8 billion, in accordance with the asset purchase agreement announced June 12, 2013.

The deal includes the acquisition of 213 stores, 199 in-store pharmacies, 62 gas stations, 10 liquor stores, four distribution centres and 12 manufacturing facilities. The majority of the new properties are in Western Canada, including Vancouver, Calgary, Edmonton and Winnipeg. The purchase was funded through an Empire equity issue completed in July 2013; proceeds from a Sobeys bond offering completed in August 2013; proceeds from the disposition of 70 Canada Safeway properties to Crombie Real Estate Investment Trust (Crombie); and bank credit facilities.

Crombie closed the $991.3-million acquisition of a portfolio of 70 retail properties in accordance with the acquisition, as previously announced on July 24, 2013. The acquisition was funded through equity and convertible debenture issuances, bank financing, the issuance of unsecured bonds, and property specific financing.

The Sobeys legal team was led in-house by Karin McCaskill, senior vice president, general counsel and secretary.

Stewart McKelvey represented Empire and Sobeys with a team that was led by Jim Dickson and included Paul Festeryga (tax), Richard Hirsch (IP), Fraser MacFadyen, Paul Saunders, Matt Newell and Marc Reardon (real estate and leasing); Lydia Bugden (bank financing), Andrew Burke, Gavin Stuttard and Trevor MacDonald (securities); Deanne MacLeod (M&A and competition), Grant Machum (labour and employment), Candace Thomas, Sadira Jan and Burtley Francis (corporate) and Level Chan (pensions).

As Canadian counsel to Safeway Inc., Blake, Cassels & Graydon LLP was involved in all aspects of the negotiation and settlement of the purchase and sale agreement and closing of the transaction. The Blakes team included Jeff Lloyd, David Kruse, Paul Singh, Doug Robertson and Hamza Dawood (M&A); Silvana D'Alimonte, Joseph Grignano and Brian Wilson (real estate); Jeffrey Trossman, Allan Gelkopf, Ian Caines and Zvi Halpern-Shavim (tax); Brian Thiessen and Shaun Parker (employment and labour); Caroline Helbronner and Sean Maxwell (pensions and benefits); Gary Daniel (intellectual property), Michael Matheson (banking) and Paul Cassidy (environmental).

Latham & Watkins LLP advised Safeway in the transaction with a corporate deal team led by Scott Haber, with Thomas Keim, Jr., Barry Bryer, Vasily Ledenev, Daniel Rawner, John Clair and Lauren Murphey (tax); Roxanne Christ, David Kuiper and Ghaith Mahmood (IP); and counsel Scott Thompson (employee benefit and compensation).

Dick Weisberg from the law offices of Richard Weisberg acted as US antitrust counsel to Safeway.

Sullivan & Cromwell LLP provided advice to Empire and Sobeys with a team of Donald Crawshaw (securities/general), Ron Creamer, Davis Wang and Guy Inbar (tax); Alexandra Korry (M&A) and Ari Blaut (financing and securities).

Stikeman Elliott LLP represented Sobeys on competition matters with a team led by Paul Collins, Mike Laskey and Michael Kilby. Stikemans also represented the syndicate of underwriters for the Empire public equity offering and the Sobeys private bond offering with a team led by Joel Binder and D'Arcy Nordick and that included Kevin Smyth, Tim McCormick, Anne Weintrop, Warren Ng, Bradley Zander and Katy Pitch (tax).

Bennett Jones LLP represented Safeway on competition matters with a team of Melanie Aitken, Randal Hughes, Adam Kalbfleisch and Kyle Donnelly.

Merovitz Potechin LLP (Bram Potechin), MacPherson Leslie & Tyerman LLP (Doug Ballou and Doug Osborn), Aikins, MacAulay & Thorvaldson LLP (Michelle Redekopp), and Stikeman Elliott (Ross MacDonald and Bruce Woolley) provided assistance with real estate matters.

Aird & Berlis LLP represented Sobeys in regulatory compliance matters involving retail operations with a team of Paige Backman, Reena Kotecha and Ajeet Grover (corporate); Peter Czegledy and Jesse Rosensweet (gaming); and Piper Morley (municipal).

Gowling Lafleur Henderson LLP was Quebec counsel to Sobeys on the public and private financing related to the acquisition of Safeway with a team that included Joëlle Boisvert and Pierre Lissoir (securities and corporate); Luc Lissoir (securities) and Naïm Antaki (corporate).

A McCarthy Tétrault LLP team of Douglas Cannon and Wendy Brousseau assisted Empire Company Limited and Sobeys Inc. with tax matters.

Stewart McKelvey represented Crombie REIT with a team of Jim Dickson, Fraser MacFadyen, Maurice Chiasson, Greg Harding, James Murphy, Allison McCarthy, Ryan Baker and Andrea Shakespeare (real estate and secured financing); Lydia Bugden (bank financing), Candace Thomas and Burtley Francis (corporate), Gavin Stuttard, Andrew Burke and Trevor MacDonald (securities).

Shea Nerland Calnan LLP (Glenn Warkentin, Sarah Thomas, Devin Mylrea and Matt Trotta), Cox, Taylor (Frank Carson and Rajiv Gandhi), Kanuka Thuringer LLP (Warren Sproule, Kelly Ruse and Mya Osatiuk), and Thompson Dorfman Sweatman LLP (Barry MacTavish and Rick Adams) assisted with real estate matters.

Scotiabank was advised by Fasken Martineau DuMoulin LLP on the financing with a team led by John Torrey and including David Ferris (banking and finance), Bradley Freelan (M&A), Christopher Steeves (tax), Anthony Baldanza (competition), David Martin and Sergio Custodio (real property); Andrew Alleyne (information technology), Ross Gascho (pensions) and Rosalind Cooper (environmental).

Goodmans LLP represented the special committee of Crombie REIT with a team of Bill Gorman, Kirk Rauliuk and Lyndsay Hatlelid (corporate and M&A); Ken Herlin and Bram Green (real estate/leasing) and Tom Macdonald (environmental).

Paul Hastings LLP represented Scotia Capital with an equity and bond offering with a team of Randal Palach and Scott Saks.

Teams from Davies Ward Phillips & Vineberg LLP represented syndicates of underwriters on two offerings associated with the Crombie REIT's acquisitions. The first syndicate, co-led by Scotia Capital Inc., BMO Nesbitt Burns Inc., and CIBC World Markets Inc., was represented by a team of Mindy Gilbert, David Wilson and Gillian Muirhead (corporate finance); Pawel Mielcarek (commercial real estate), Siobhan Monaghan and Raj Juneja (tax) and Sarah Powell (environmental). The second syndicate, co-led by CIBC World Markets Inc., TD Securities Inc., and Scotia Capital Inc., was represented by a team of Mindy Gilbert and Kevin Greenspoon (corporate finance); Gabriella Lombardi, Steven Martin and Pawel Mielcarek (commercial real estate); Siobhan Monaghan and Raj Juneja (tax) and Sarah Powell (environmental).

Simpson Thacher & Bartlett LLP was counsel to the underwriters for Sobeys' public financing.