Stater Bros. Inc. said Tuesday that it will nearly double its presence in Orange County by acquiring 14 supermarkets as Albertson's Inc. unloads 145 stores in the West to win approval of its $9.8-billion acquisition of American Stores Co.
In all, 20 Albertsons, Lucky or Max Grocery stores in Orange County are changing hands. Commerce-based Certified Grocers of California will buy four stores, while Vons Cos. and Ralphs Grocery Co. will get one each. The deal will give Colton-based Stater Bros. 30 stores in Orange County.
The divestiture of stores will significantly alter the competitive landscape in many parts of Southern California, allowing two of the state's largest supermarket chains to move into new territory and giving independent operators new stores in prime urban locations.
Albertson's on Tuesday agreed to divest 117 stores in California in order to win antitrust approval of its planned acquisition of American Stores, which owns Lucky and SuperSaver stores. Twenty-eight more stores are being divested in New Mexico and Nevada.
The deal, which will create the nation's second-largest grocery chain, with 2,400 stores in 38 states, raises concerns among some observers over increasing consolidation in the supermarket business, resulting in fewer choices for consumers.
The sale is the largest ever required of a retailer by the Federal Trade Commission and is the last remaining hurdle for the merger of the two grocery giants, which was announced last August. The acquisition is expected to be complete by midnight tonight.
Under the terms of the agreement with the Federal Trade Commission and state attorneys general, 31 stores will be sold to Certified Grocers, which will in turn sell those stores to its membership of independent grocery chains including Gelson's, Jon's and Top-Value; 27 will be sold to supermarket operator Raley's Inc.; 40 stores will be sold to Ralphs; 43 stores and one site will be picked up by Stater Bros.; and four stores will go to Vons. All of the stores must be divested within the next four months, according to FTC guidelines.
The sales will provide the biggest boost to Stater Bros, now located mainly in the Inland Empire. The purchases will increase its size almost 40%, giving it a much larger presence in Orange and Los Angeles counties.
"We'll go from a company with $1.9 billion in annual sales to $2.4 billion in just 90 days," said Jack Brown, Stater Bros. chief executive. "This will give us much greater purchasing power." The chain will begin converting the stores to the Stater Bros. format in 45 days.
