STELLARTON, NS, Feb. 13, 2014 /CNW/ - Sobeys Inc. today announced that binding purchase and sale agreements have been entered into with Overwaitea Food Group ("Overwaitea") and Federated Co-operatives Limited on behalf of the Co-operative Retailing System ("Co-op"), that will see Sobeys sell 22 of the 23 stores it is required to divest as part of its October, 2013 Consent Agreement with the Competition Bureau related to its purchase of Canada Safeway. Additionally, Sobeys has signed a binding letter of intent with another retailer for the sale of its Price Chopper location in Winnipeg, which the company is also required to divest as part of its October Consent Agreement.

Through the negotiation of these transactions, Sobeys also agreed to include an additional seven stores in British Columbia in the package to be acquired by Overwaitea. This was done to create a divestiture package that meets the needs of both Sobeys and Overwaitea.

Total proceeds from the Overwaitea and Co-op transactions, including related real estate, will be approximately $430 million, subject to customary closing adjustments. Proceeds will be used to repay bank debt. The total annual sales from these stores are approximately $690 million and they generate EBITDA of approximately $59 million.

Both the Overwaitea and Co-op agreements have received approval from the Competition Bureau and Sobeys anticipates the deals will close in March or early April. The sale of the Price Chopper location remains subject to finalization of an asset purchase agreement with the purchaser and approval from the Competition Bureau.

Overwaitea has agreed to purchase the following 15 store locations: Safeway 2345 Beacon Avenue, Sidney, BC Safeway 1950 Foul Bay Road, Victoria, BC Safeway 3958 Shelbourne Street, Victoria, BC Safeway 1143 - 56 Street, Tsawwassen, BC Safeway 131 Signal Road, Fort McMurray, AB Sobeys 1000 Railway Avenue, Canmore, AB Sobeys 65 Bow Street, Cochrane, AB Thrifty Foods 270 East Columbia Street, New Westminster, BC Safeway* 3756 - 10 Avenue, Port Alberni, BC Safeway* 610 - 6th Street, New Westminster, BC Safeway* 181 Trans-Canada Highway, Duncan, BC Safeway* 108 - 3170 Tillicum Road, Victoria, BC Safeway* 370 Trans-Canada Highway, Ladysmith, BC Thrifty Foods* 18888 North Parallel Road, Abbotsford, BC Thrifty Foods* 2000 Island Highway, Nanaimo, BC * Additional stores not included in October Consent Agreement Co-op has agreed to purchase the following 14 store locations: Safeway 1441 Main Street, Winnipeg, MB Safeway 77 Vermillion Road, Winnipeg, MB Safeway 850 Dakota Street, Winnipeg, MB Safeway 1120 Grant Avenue, Winnipeg, MB Safeway 2331 - 66 Street NW, Edmonton, AB Safeway 3801 Albert Street, Regina, SK Safeway 3310 - 8 Street East, Saskatoon, SK Safeway 4926 - 46 Avenue, Taber, AB Sobeys 10004 - 99 Avenue, Fort Saskatchewan, AB Sobeys 5421 - 50 Street, Leduc, AB Sobeys 4703 - 50 Street, Wetaskiwin, AB Sobeys 18370 Lessard Road, Edmonton, AB Sobeys 5036 - 106 Avenue NW, Edmonton, AB IGA 6204 - 90 Avenue NW, Edmonton, AB

This news release contains forward-looking information reflecting management's expectations regarding timing and completion of the agreed sales and final use of proceeds. The forward-looking statements in this news release are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from current expectations, including satisfaction of various closing conditions and closing adjustments. The company does not undertake to update any forward-looking statements that may be made from time to time by them or on their behalf other than as required by applicable securities laws.

About Sobeys Inc.

Proudly Canadian, with headquarters in Stellarton, Nova Scotia, Sobeys has been serving the food shopping needs of Canadians for 106 years. A wholly-owned subsidiary of Empire Company Limited (TSX:EMP.A), Sobeys owns or franchises more than 1,500 stores in all 10 provinces under retail banners that include Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, and Lawton's Drug Stores as well as more than 330 retail fuel locations. Sobeys and its franchise affiliates employ more than 124,000 people. The company's goal is to be widely recognized as the best food retailer and workplace environment in Canada. More information on Sobeys Inc. can be found at www.sobeyscorporate.com.

SOURCE Sobeys Inc.