"The health and wellness space is an attractive space," said Pavi Binning, president of George Weston Limited (TSX:WN), during a conference call Tuesday.
"That could absolutely be an outcome (of the Shoppers acquisition), that we look at food businesses that operate in that space."
However, the majority owner of the grocery store chain and fresh and frozen foods producer Weston Foods said it isn't planning on making any big purchases soon.
"Given the transaction, it's prudent to maintain strong cash balance at Weston while Loblaw deleverages over the next few years," Binning told analysts.
"We will have capital available for Weston Foods to make small acquisitions in growth areas, but the amount we make available will be limited."
George Weston made its comments after reporting that its second-quarter net earnings attributable to shareholders fell to $98 million, from $135 million a year earlier.
The loss was primarily due to a recurring accounting item related to a sale agreement for 9.6 million Loblaw shares.
Basic net earnings per common share were 69 cents, down from 98 cents during the same period last year.
During the quarter, George Weston booked a charge of 34 cents per share for net interest expense and other financing charges related to a fair value adjustment stemming from the forward sale agreement, which has been on Weston's books since 2004.
After excluding certain items, George Weston reported $1.10 per share of adjusted basic earnings per share, up from $1.05 a year earlier and two cents per share better than analysts had estimated.
George Weston's sales were $7.79 billion, up from $7.63 billion a year ago. Weston Foods accounted for about $413 million of the revenue, while Loblaw accounted for $7.52 billion.
The company said it was able to protect its sales volume through promotional activities, despite increasing the prices of its bread products earlier in the year to make up for rising commodity costs.
Weston Foods saw a sales increase of 3.3 per cent from $400 million a year ago. Loblaw sales were up two per cent from $7.38 billion during the same quarter last year.
The company said it is investing in innovation, after its new line of flatbreads and gluten-free products helped to grow sales volume despite a soft market.
"Innovation in our company now is a commandment," said Jairo Senise, president of Weston Foods.
He added that Weston Foods has several new products in the pipeline that will be launched soon.
George Weston is the largest shareholder of Loblaw, which is set to add Shoppers Drug Mart (TSX:SC) to its current list of grocery, pharmacy and clothing businesses. The companies have also set up Choice Properties Real Estate Investment Trust, which began trading publicly after the quarter ended.
George Weston, which is controlled by the Weston family, continues to have a stake in Choice, which has acquire about $7 billion of properties and related assets from Loblaw.
Weston Foods is a fresh and frozen baked goods company that owns brands like Wonder and D'Italiano breads.