Loblaw Companies Ltd. and George Weston Ltd. have announced a reorganization which will see Loblaw divest its 61.6 per cent interest in Choice Properties Real Estate Investment Trust (REIT).
George Weston will assume the 61.6 per cent interest held by Loblaw and Loblaw minority shareholders will receive George Weston shares in exchange.
Loblaw will not retain any equity interest in Choice Properties and will focus entirely on its pharmacy and grocery business.
"The reorganization will result in a more efficient group structure, that strategically benefits both Loblaw and Choice Properties, which in turn strengthens GWL," said Galen G. Weston, chairman and CEO of Loblaw and George Weston.
"Over the past few years, the strategies of Loblaw and Choice Properties have diverged,” said Sarah Davis, president of Loblaw. “Loblaw is focused on strengthening its core retail business and growing in areas such as digital, healthcare, payments and rewards. Our retail store network continues to be a key competitive advantage for us, but we don't see ownership of real estate as core to our strategy going forward."
The transaction is expected to close in the fourth quarter.