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Reports at this hour say that Canada’s Metro has reached an agreement to acquire A&P Canada for a total of $1.45 billion (US) - $1 billion (US) in cash, and the remainder in stock. The deal almost doubles Metro’s size.

The combined company will have 579 food stores and annual sales of about $9 billion (US). The deal is scheduled to close in August 2005, and will leave the Great Atlantic & Pacific Tea Co. owning just shy of 16 percent of Metro’s shares.

"We are very pleased to be acquiring A&P Canada, the second largest food retailer in Ontario, with its strong management team and significant presence in the high-growth Greater Toronto Area, Canada's largest market. The acquisition, combined with our current operations in eastern Ontario and our leading position in Quebec, significantly enhances Metro's strategic position in Canada's two largest markets. This is a unique opportunity to transform Metro's strong regional base into a significantly larger platform with increased scale and geographic diversification. The strategic and geographic fit between our two companies is compelling and…I am confident that together, we will continue to innovate, grow and deliver value to our customers and shareholders," said Pierre H. Lessard, Metro’s president/CEO, in a prepared statement.

Christian Haub, chairman/CEO of A&P, released the following statement: "We are delighted to enter into this historic agreement with Metro, and to participate in its future growth and success with a significant investment position. We have the utmost confidence in Metro's management and retail operations, which have produced an outstanding performance track record over the past decade. The addition of A&P's successful operations creates one of the strongest food retailers in Canada, offering outstanding long-range growth. We also believe that our relationship will promote an exchange of best practices that will benefit the operations of both companies over time."
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