Shoppers Drug Mart has been sold to U.S. leveraged buy-out group Kohlberg Kravis Roberts & Co. for $2.55 billion in cash.
The conditional deal ends a world-wide auction involving 90 potential buyers. Seven companies took part in the final bidding.
Kohlberg Kravis Roberts specializes in leveraged-buyouts, and is best known for its "Barbarians at the Gate" takeover of RJR Nabisco for $24.6 billion US in 1988.
The group gets its investment capital from institutions such as pension funds.
The sale is the latest in a series of sell-offs by Canadian conglomerate Imasco, Shoppers' parent company.
The Shoppers deal will go ahead if another company, British American Tobacco, succeeds in its bid to take over Imasco.
BAT is offering $41.60 per share for the 58 per cent of Imasco stock it does not own, and wants to keep only Imasco's Imperial Tobacco unit. It plans to sell off the company's other divisions.
BAT has already reached an agreement to sell Canada Trust to TD Bank for almost $8 billion.
Shoppers, (Pharmaprix in Qubec), had sales of $4.2 billion in 1998, making it Canada's biggest drug store chain.
Shoppers CEO David Bloom said customers won't notice any change as a result of the chain's sale.