Canada’s largest grocery retailer, Loblaw Companies Ltd., has announced it plans to buy the country’s biggest pharmacy chain, Shoppers Drug Mart, for $12.4 billion.

Loblaw will acquire all of the outstanding Shoppers Drug Mart common shares for $33.18 in cash plus 0.5965 Loblaw common shares per each Shoppers Drug Mart common share, on a fully pro rated basis.

“This combination creates a compelling new blueprint for the future, positioning us to capitalize on important trends in society, from the emphasis on health, wellness and nutrition, to the imperatives of value and convenience,” says Loblaw’s executive chairman, Galen G. Weston.

Shoppers Drug Mart will operate as a separate division of Loblaw under the management of its current CEO, Domenic Pilla.