UPDATE 4-Loblaw to buy Shoppers in C$12.4 bln bid to defend turf
* Offer of C$61.54 a share represents 27 percent premium
* Canadian retailers face competition from Wal-Mart, Target
* Combined company would have had C$42 bln revenue in 2012
* Competition Bureau says to review deal
By Solarina Ho and Bhaswati Mukhopadhyay
July 15 (Reuters) - Loblaw Cos Ltd, Canada's largest food retailer, announced a C$12.4 billion ($11.9 billion) deal on Monday to buy Shoppers Drug Mart Corp, the country's biggest pharmacy chain, to bulk up against intensifying competition.
News of the tie-up, Canada's biggest merger deal so far this year, sent Shoppers shares soaring 26 percent to just under the C$61.54 per share price offered by Loblaw. Loblaw shares rose more than 9 percent at one point as investors welcomed the prospect of cost savings and increased scale.
Loblaw and parent George Weston Ltd have been under increasing pressure from long-time foreign rival Wal-Mart Stores Inc, which has ramped up its grocery offerings. Newer entrant Target Corp, which offers a smaller selection of groceries, opened its first 24 Canadian stores in March and plans to have 124 stores across the country by yearend.
And local rival Empire Co Ltd last month said it was acquiring Safeway Inc's Canadian assets for $5.7 billion, cementing its position as Canada's No. 2 grocer. Continued...