UPDATE 1-Sobeys parent Empire Co to buy Safeway Canada for C$5.8 bln
TORONTO, June 12 (Reuters) - Empire Company Ltd, operator of the Sobeys grocery chain, said on Wednesday it is buying the Canadian arm of Safeway Inc for C$5.8 billion ($5.70 billion), a deal that will expand its reach in Western Canada.
Empire said the deal, one of the biggest in the Canadian retail sector this year, includes 213 full-service grocery stores under the Safeway banner in Western Canada.
Safeway's Canadian arm generated sales of C$6.7 billion and had C$513 million of adjusted earnings before interest, taxes, depreciation and amortization in the 12 months ended March 23.
The deal is expected to boost Empire's earnings immediately following the close of the transaction.
The all-cash transaction will be financed through equity and debt offerings, along with a lease-back deal on real estate assets being acquired.
The takeover, which is subject to regulatory approval, is expected to close this fall. Scotiabank and Morgan Stanley acted as advisers to Empire on the acquisition.