Marc Poulin knew he had an important telephone call to make.
It was 4 p.m. on June 12 last year and the chief executive officer of Sobeys Inc. was about to unveil an unexpected $5.8-billion deal to acquire rival Safeway Inc.’s stores in Western Canada, shoring up Sobeys’s position as the country’s No. 2 grocer. Every major competitor lusted after Safeway, but Sobeys had quietly won the prize.
Among the chains most intent on acquiring those stores was Metro Inc., the country’s third-largest grocer. It so happens that Metro’s CEO, Eric La Flèche, is an old high-school buddy of Mr. Poulin.
“He was the first person I called,” Mr. Poulin says, poking a plastic fork and knife into a $14.99 lunch of roast beef and salad in the eatery of a bustling new Sobeys Extra supermarket. “I didn’t want him to be blindsided …
“I wanted him to be aware of it just to be fair and polite. I called him and said, ‘Eric, we’re making this announcement, you may want to huddle with your PR team and prepare yourself because you’re going to get lots of questions.’”
The 52-year-old likens this gesture to the strategy he uses during his weekly hockey games. “You don’t play to injure someone,” he says. “You just play to score goals.”
It’s an approach that surfaces in many aspects of Mr. Poulin’s life, from corporate deal-making to playing hockey and chess. Strategy and drive served him well as he stick-handled secret negotiations that began in the fall of 2012, when he and Paul Sobey, former CEO of Sobeys and its parent, Empire Co. Ltd., and a fourth-generation member of the controlling family, approached the struggling U.S. grocer about selling its profitable Canadian division.
The deal is expected to spark a wave of consolidation in the competitive grocery sector, which had been rocked by the arrival of U.S. discounter Target Corp. and the expansion of Wal-Mart Canada Corp.’s food offerings. In July, Loblaw Cos. Ltd., the top market player, announced a mammoth, $12.4-billion agreement to swallow Shoppers Drug Mart Corp.
In Ontario, where Sobeys’s fledgling FreshCo chain dukes it out with other discount grocers, one industry executive recently called the landscape a “bloodbath.”
The heated environment is partly why the Safeway acquisition was so crucial for Sobeys – and why it went to great lengths to avoid a bidding war, Mr. Poulin says. Code-named “London,” the project consisted of meetings about the deal that were held mostly in hotels, often in cities other than the location of the two companies’ head offices, for fear of tipping someone off. Ultimately, there was no auction for the coveted Safeway assets.
“Nobody thought we could pull it off,” Mr. Poulin says. “To tell me that when we started on that journey that I had certainty that we would get it done – not really.”
Mr. La Flèche says the June 12 call from his old high-school friend was a surprise and very brief. “It was a courtesy and I appreciated it,” Mr. La Flèche says. At the time, his spokeswoman told The Globe and Mail: “Safeway knew our interest. We were not invited to negotiate. We doubt that we would have been ready to pay that amount for these assets.”
But while Mr. Poulin has enjoyed success on the competitive battlefield, what he appreciates most is being part of a team. Which is what draws him to hockey (he plays defence), which he began playing after university.
“There’s enough competition in business that I’m not trying to get more,” he says, despite his wife Ginette’s belief that he lets his aggression out on the ice. “I prefer the social element of playing with friends – or against friends – than just doing an exercise routine. You’re on the ice and you don’t think about anything else. You run on a treadmill and it’s more difficult to get away from thinking of the business.”
|EMP.A-T Empire Company||65.84||
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|SWY-N Safeway Inc.||38.39||
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