PLEASANTON, CA-In a moved to shed debt, Safeway Inc., one of the top grocery retailers in North American has reached an agreement to sell its Canadian operations for about $5.7 billion (CAN$5.8) in cash.

The recipient of the 213-store group is Sobey's a Canadian chain owned by Empire Co., Ltd., Nova Scotia, and will include assumption of certain liabilities. Included in the deal are 199 in-store pharmacies and 62 gas stations that are located on the Safeway properties.

"We are pleased to enter into this agreement with Sobeys in order to realize the higher multiples attributed to Canadian supermarket companies," Robert Edwards, president and CEO of Safeway Inc. said in a statement. "The substantial cash proceeds from this transaction will allow us to create value for Safeway stakeholders and contribute to the growth of the ongoing business."

According to various reports, California-based Safeway (which also owns other brands including Von's, Dominicks, and Randall's Food Markets) will use part of the gains of the sale to pay off more than $2 billion in debt. Some of the proceeds will allow for stock buy backs and new investment.

Safeway Inc. currently operates 1,415 stores and 20 manufacturing facilities in the United States with 2012 revenues of $37.5 billion and more than 200 stores and 12 manufacturing facilities in Canada with 2012 revenues of $6.7 billion.

A wholly-owned subsidiary of Empire Company Limited, Sobeys owns or franchises more than 1,300 stores in all 10 provinces under retail banners that include Sobeys, IGA, Foodland, FreshCo, and Thrifty Foods, as well as Lawton's Drug Stores, in addition to over 260 retail fuel locations. Sobeys and its franchise affiliates employ more than 95,000 people.