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International team advises Metro Inc. on acquisition of Jean Coutu for C$4.5bn

October 30, 2018 Client: Metro Inc.

Our Montreal, Quebec City, Ottawa, and New York offices advised Metro Inc. (Metro) on the closing of its previously announced acquisition of The Jean Coutu Group (PJC) Inc. (the Jean Coutu Group) for C$4.5bn (the Transaction). The Jean Coutu Group shareholders collectively received 25 percent of the acquisition price in the form of Metro shares (and the balance in cash) representing, in the aggregate, an approximate 11 percent equity interest in Metro.

The cash portion of the Transaction was financed by (i) the sale by Metro Canada Holdings Inc. (Metro Holdings), a wholly-owned subsidiary of Metro, of the majority of its holding in Alimentation Couche-Tard Inc. (Couche-Tard) for an aggregate amount of C$1.5bn, (ii) the issuance by Metro of C$1.2bn aggregate principal amount of senior unsecured notes, and (iii) credit facilities in an aggregate maximum principal amount of C$750m entered into with a syndicate of lenders led by Bank of Montreal, as administrative agent.

On October 2, 2017, Metro and the Jean Coutu Group entered into a definitive combination agreement providing for the Transaction, subject to the approval of the Jean Coutu Group shareholders, regulatory approvals and certain other customary closing conditions.

On October 11, 2017, Metro Holdings entered into three separate agreements in order to realize the value of the majority of its holding in Couche-Tard and pursuant to which it agreed to sell (i) to dealers led by National Bank Financial Inc. and BMO Capital Markets, as bookrunners, by way of a block trade bought deal, totalling 11,369,599 Class B Subordinate Voting Shares of Couche-Tard at a price per share of C$57.17, for proceeds of approximately C$650m, (ii) to CDP Investissements Inc. et CDPQ Marchés Boursiers Inc., two wholly-owned subsidiaries of Caisse de dépôt et placements du Québec, by way of a private agreement, a total of 11,369,599 Class A Multiple Voting Shares of Couche-Tard at a price per share of C$57.17, for proceeds of approximately C$650m and (iii) to Couche-Tard, for the repurchase for cancellation, of 4,372,923 Class B Subordinate Voting Shares of Couche-Tard, at a price per share of C$57.17, for proceeds of approximately C$250m.

On December 4, 2017, Metro issued C$1.2bn aggregate principal amount of senior unsecured notes. The Notes were offered through an agency syndicate consisting of BMO Nesbitt Burns Inc., National Bank Financial Inc. and CIBC World Markets Inc. as co-lead managers and co-bookrunners, together with Desjardins Securities Inc., RBC Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc. and MUFG Securities (Canada), Ltd. as co-managers.

On May 10, 2018, Metro and some of its subsidiaries entered into a credit agreement with a syndicate of lenders led by Bank of Montreal, as administrative agent, providing for credit facilities in an aggregate maximum principal amount of C$750m in order to finance the Acquisition.

The team included Paul Raymond, Steve Malas, Mathieu Deschamps, Emmanuel Grondin, Renée Loiselle, Thomas Charest-Girard, Carole Gilbert, Alexandrine Parent, Weihe Feng, Véronique Barry, Kelley Rourke and Pierre-François Tetreault (Corporate finance and securities), Jules Charette and Antoine Desroches (Tax), Alain Ricard, Michele Friel and Thomas Nichols (Banking), Thierry Dorval, Martin Masse, Erin Brown and Lady Africa Sheppard (Competition), Jean Bertrand, Olga Farnam, Pierre Duquette, Julie Paquette, Elif Oral, Caroline Légaré and Marie-Hélène Caron (Regulation), Louis Roy (Real Estate) and Danielle Higgins and Hélène Delorme (Corporate Services).