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Introducing the new Albertsons

2/25/2013

When Albertson's LLC announced last month that its parent company, AB Acquisition, an affiliate of Cerberus Capital Management, signed an agreement to acquire 877 stores from Supervalu in a deal valued at some $3.3 billion — a move that will reunite all Albertsons stores under one operator — it recast the rankings of the industry's leading pharmacy retailers.


Following the acquisition, Albertsons and its subsidiaries — which will include the Albertsons, Acme, Jewel-Osco, Shaw's and Star Markets, and related Osco and Sav-on in-store pharmacies — will consist of 1,069 stores and 12 distribution centers, and will employ roughly 110,000 associates.


According toDSNestimates, the New Albertsons will have $21.4 billion in total sales and about $1.8 billion in pharmacy sales.


While Albertson's LLC has indicated that "it's too soon to speculate about key initiatives or new developments" that will take place following the closing of the acquisition, what is known is that several industry observers are optimistic about the deal.


"We believe that similar to the last Albertsons' transaction, that this also is a tremendous asset play for Cerberus," stated Citi Research analyst Deborah Weinswig.


In 2006, the Cerberus-led group acquired more than 650 Albertsons stores — a deal that has proven to be a win, thanks in part to store sales and real estate moves over the years.


"In 2006, we acquired a set of stores that lacked investment and were in tough shape, but ... we have grown into a solid regional supermarket chain with growing sales. I believe we can be successful again," stated Albertson's LLC CEO and retail veteran Bob Miller. In addition to leading the new Albertsons, Miller also will assume the role of nonexecutive chairman of Supervalu.

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