Albertsons Companies, formed from the 2015 merger of the existing Albertsons business with rival Safeway, is the second largest traditional supermarket group in the US (behind Kroger) and #3 groceries retailer overall (behind Walmart). It oversees an extensive collection of 20 different regional supermarket banners. Albertsons and Safeway get top billing, but the collection also includes Shaw's, Star Market and Acme (mostly on the North Eastern seaboard), Jewel-Osco (in the Mid-West), Vons (California and Nevada), Tom Thumb (in Texas), Carr's (in Alaska) and others. As of 2021, the group operated a network of 2,277 stores across 35 states, mainly in the western, central and north-eastern US. More than 75% of stores also contain an instore pharmacy. The different store banners share the parent group's collection of private label brands, which include Signature Select, Signature Cafe, Lucerne and O Organics, each of which has retail sales in excess of $1bn a year. In 2017, the group acquired meal kits service Plated. The current group was formed from a series of complicated deals engineered by private equity fund Cerberus Capital Management, also the biggest shareholder in Albertsons' previous owner, the discount groceries group Supervalu. In 2015, Cerberus announced plans for an IPO of Albertsons Companies' stock, but this was quietly abandoned a year later. An alternative route to a listing presented itself in 2018: Albertsons said it would merge into quoted pharmacy group Rite Aid in a deal that would create a group with revenues of over $80bn. However, that arrangement too was subsequently cancelled as a result of opposition from Rite-Aid's institutional shareholders. One of the first items on the agenda of new CEO Vivek Sankaran, recruited from PepsiCo in 2019, was to find a route to expansion. Possibilities included merger with another leading US grocer; or a revival of plans for an IPO. The latter ended up as the chosen route, allowing Cerberus to begin finally cashing out its holding. Despite widespread turbulence in the markets as a result of Coronavirus, Cerberus sold a 17.5% stake to fellow investor Apollo Global Management in early 2020, and then launched an IPO in June to reduce its holding still further. Revenues for the year to Feb 2021 were $69.7bn with net income of $850.2m.
Capsule checked 16th April 2021
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Historical profile information for Albertsons / Safeway
Adbrands Daily Update 19th Jun 2020: The Albertsons IPO is back on, with plans for public trading to begin before the end of June. Controlling shareholder Cerberus held some 90% of Albertsons' stock until May, when it transferred what is like to end up as a 17.5% stake to fellow investment fund Apollo. Following the full public offering it is expected to reduce down to just under a third of Albertsons' equity. The IPO values the groceries group at a little over $10bn.
Adbrands Daily Update 21st May 2020: US grocery giant Albertsons appears to have pulled plans for an IPO for the third time in five years. The current owners - a consortium of investors led by Cerberus Capital - have been seeking routes to reduce their current holding since at least 2015, but have each time been stymied by forces beyond their influence. Albertsons filed new plans for an IPO earlier this year, despite the growing threat from Coronavirus. However, the scale of the pandemic seems now to have curtailed those ambitions. Instead, controlling shareholder Cerberus Capital has recruited rival Apollo Global Management as a new partner. Apollo is acquiring a $1.75bn of convertible preferred stock, which will become equivalent to around 17.5% of equity.
Adbrands Daily Update 1st Apr 2019: America's third biggest food retailer Albertsons Companies - owner of Albertsons, Safeway, Vons and other supermarket chains - announced the appointment of senior PepsiCo manager Vivek Sankaran as its new CEO. He takes over from former Starbucks and Haggen executive Jim Donald, who moves up to co-chairman after only six months in the CEO role, sharing that position with Leonard Laufer, a senior managing director at Albertsons' owner Cerberus Capital. Sankaran is moving from PepsiCo only three months after being promoted to CEO of North America Foods. He is being replaced in that role by Steven Williams.
Adbrands Weekly Update 9th Aug 2018: US pharmacy chain Rite-Aid - or rather what remains of that group following the sale of almost half its outlets to Walgreens last year - hit another corporate speed bump with the cancellation of its merger with supermarket group Albertsons. That followed growing opposition from Rite-Aid's leading institutional shareholders who said the proposed deal undervalued the company and gave Albertsons too much control over the combined business. An earlier arrangement whereby all of Rite-Aid would have been acquired by Walgreens Boots Alliance was also called off as a result of regulatory problems.
Adbrands Weekly Update 18th Apr 2018: Tax reforms allowed privately owned US supermarket Albertsons to claw a net profit for its year to Feb 2018, despite a 1% decline in same-store sales. Net income came in at $46m, helped by a one-off gain of $964m. For the previous year, the group reported a $373m net loss. Revenues edged up only marginally to just under $60bn. A key element in Albertsons' future plans is the planned merger into publicly quoted Rite-Aid. The merged company would operate about 4,900 stores - including more than 4,300 pharmacies and over 300 retail health clinics - and generate pro forma combined sales of $83 billion. All it needs is approval from Rite-Aid's shareholders, who are due to vote in July this year. Rite-Aid's board has already given its firm support, but some shareholders believe the proposed deal undervalues their group and are wary of exposure to the hard-pressed grocery sector. A green light may be no sure thing.
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