McKesson Corp. is speaking to prospective buyers for its Canadian drugstore chain Rexall Pharmacy Group that it purchased seven years ago for $3 billion Canadian ($2.2 billion US). The Texas-based company bought the chain from Katz Group head by Daryl Katz, owner of the NHL Edmonton Oilers, in 2016 in an attempt to strengthen its position in Canada’s pharmaceutical supply chain. McKesson sold off its European businesses to Germany’s Phoenix Group in 2021.
Rexall has 400 stores across Canada with the largest concentration in Ontario. Potential buyers could include the Empire Group which owns Sobeys, Safeway as well as the Lawtons Drug Store chain in Atlantic Canada. The Metro Group with its’ Metro grocery stores might be interested in expanding its Quebec-based Jean Coutu drug brand. Although unlikely, Western chain London Drug could expand their footprint east by adding Rexall to their portfolio.
U.S. drug chains may not be as eager to enter the Canadian market after Target’s failure and with CVS struggling, Rite Aid in bankruptcy protection that would leave only Walgreens. The Quebec convenience store chain Alimentation Couche-Tard has even been mentioned as a possibility. The most obvious suitor would be George Weston Ltd. as it already owns Loblaw and Shoppers Drug Mart. The Canadian Competition Bureau, already worried about the lack of competition in Canada, will likely watch any potential buyer closely.