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Despite public statements that Tesco is not interested in acquiring any or all of Albertsons, company CEO Sir Terry Leahy reportedly has dispatched a 65-person team to American shores to figure out what to buy and when.

Interestingly, there are reports that the British retailing giant may actually be interested in acquiring Safeway – the California-based, 1800-unit chain with which Tesco already is in business as co-owners of Safeway’s online home shopping business. Analysts put the price of acquiring Safeway at approximately $11 billion (US).

Tesco apparently has determined that there are three countries that can fuel its long-term growth – the US, Japan, and Canada – especially as its options dwindle in the UK because of simple geography. The company also has been under pressure in the UK because of competitors complaining that Tesco has too great a market share and is anti-competition.

Other chains rumored to have attracted Tesco’s interest are Meijer and Wegmans – though whether either of these privately owned companies would be available is highly questionable.

There also are reports that Tesco executives have already spoken with major manufacturers such as Procter & Gamble and Unilever to work out supply chain and pricing issues. One report in the British media characterized the discussions as “extensive” rather than preliminary, and noted the seriousness of Tesco’s intentions can be measured by the size and seniority of the delegation sent to the US.

According to a report in Forbes, a Tesco spokeswoman said that the company has “people in many countries and we are constantly looking at our portfolio to see how we can grow the business.”
KC's View:
Reading and writing the continuing coverage of this story reminds us of what Winston Churchill said early in World War II:

"This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

No kidding.

We’re not surprised that Tesco’s attention may be elsewhere than on Albertsons; we could be wrong, but we’ve been writing from the beginning that we didn’t think it was a good fit.

Safeway, on the other hand, is intriguing. Especially because the two companies already work together.