UK retailer Sainsbury is bailing out of the US, selling its 202-unit New England-based Shaws chain to Albertsons for $2.475 billion. The deal, for about $2.11 billion in cash, plus about $368 million in lease assumptions, is expected to be finalized in early May.
"This acquisition will extend our national footprint into Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire and Maine, bringing our total national market presence to more than 2,500 stores in 37 states," Albertsons said in a prepared statement.
Shaw's (which also owns Star Markets) is the 11th-largest supermarket company in the US, and the second-largest food retailer in New England. (Ahold's Stop & Shop is number one.)
Also in a prepared statement, Sainsbury management said, “The Board believes this is an excellent transaction delivering value for shareholders and has taken into account the increasingly competitive environment in the US grocery market. It believes Shaw’s best interests are served being part of a larger US retailer and that considerable on-going investment would be required to maintain its strong market position in the future.”
It wasn't a good day for Sainsbury. The company said its same-store sales fell 0.9% for the 12 weeks to March 27, and were down 0.2% for the full fiscal year. Its Deputy Managing Director Sara Weller announced that she will quit the company in June to head up GUS PLC's Argos chain. And, Sainsbury said that Sir Ian Prosser, who was slated to become its chairman, has withdrawn because of shareholder opposition.
There was one bit of positive news for Sainsbury. The company said that it is acquiring Bells Stores, a 54-store family-owned chain in northeast England.
"This acquisition will extend our national footprint into Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire and Maine, bringing our total national market presence to more than 2,500 stores in 37 states," Albertsons said in a prepared statement.
Shaw's (which also owns Star Markets) is the 11th-largest supermarket company in the US, and the second-largest food retailer in New England. (Ahold's Stop & Shop is number one.)
Also in a prepared statement, Sainsbury management said, “The Board believes this is an excellent transaction delivering value for shareholders and has taken into account the increasingly competitive environment in the US grocery market. It believes Shaw’s best interests are served being part of a larger US retailer and that considerable on-going investment would be required to maintain its strong market position in the future.”
It wasn't a good day for Sainsbury. The company said its same-store sales fell 0.9% for the 12 weeks to March 27, and were down 0.2% for the full fiscal year. Its Deputy Managing Director Sara Weller announced that she will quit the company in June to head up GUS PLC's Argos chain. And, Sainsbury said that Sir Ian Prosser, who was slated to become its chairman, has withdrawn because of shareholder opposition.
There was one bit of positive news for Sainsbury. The company said that it is acquiring Bells Stores, a 54-store family-owned chain in northeast England.
- KC's View:
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Well, so much for Sainsbury's globalization plans.
We hope that this proves to be a positive move for Shaws, which operates a broad range of stores. It has one of the nicest stores in the country in downtown Boston, and a store that can best be described as mediocre that is about a half-mile from MNB world headquarters. (This kind of disparity is hardly unique among major chains.)
With attention and money from Albertsons, perhaps Shaws can raise the level of its overall game and provide even more competition for Stop & Shop - which would be good for everyone.
No word as of this posting whether Albertsons will retain the Shaws name, though we suspect it will.
