We are placing our ratings on Loblaw Cos. Ltd., Shoppers Drug Mart Corp., George Weston Ltd., and Choice Properties REIT on CreditWatch with negative implications after Loblaw announced its intention to acquire Shoppers for C$12.4 billion. We believe this could strengthen Loblaw's business risk profile by combining Canada's largest supermarket and pharmacy chains. On the other hand, we expect that new debt to fund the acquisition would strain Loblaw's "intermediate" financial risk profile. Pro forma fully adjusted debt to EBITDA of 3.5x-4.0x would be high for the investment-grade rating, but we expect that free operating cash flow will be available for debt reduction in the next few years. On July 16, 2013, Standard&Poor's Ratings Services placed its ratings
