08/03/2011 08:23 EDT | Updated 10/03/2011 05:12 EDT

Canadian Tire's Forzani Purchase Gets Competition Bureau Approval

Flickr: Gamma-Ray Productions

TORONTO - Canadian Tire Corp. (TSX:CTC.A) says it has clearance from the Competition Bureau for its $771-million takeover of The Forzani Group Ltd. (TSX:FGL).

The retailer said Wednesday it has received a letter in which the Competition Bureau states it does not intend to take any action related to the transaction, which essentially clears the way for the purchase to be completed.

"Forzani is an excellent fit with the Canadian Tire family and will extend our reach to include new customers," Canadian Tire president and CEO Stephen Wetmore said in a release.

"We look forward to closing the acquisition in short order and getting down to work."

The Canadian Tire offer is valued at $26.50 in cash for each outstanding class A common share of Forzani. The bid amounted to a 50 per cent premium to Forzani's stock price prior to the offer. The offer is open for acceptance from Forzani shareholders until Aug. 18.

Forzani owns some 500 stores under various banners, including Sport Chek and Athletes World, as well as more niche brands like Nevada Bob's Golf and Hockey Experts.

Canadian Tire has long sold basic sporting equipment such as skates and bikes, but the Forzani purchase will allow it to cater to 18-to-35-year-olds who tend to shop in malls for more specific equipment and trendier brands.

The transaction will make Canadian Tire owner of the No. 1 and No. 2 sporting goods retail chains in the country.