Albertsons to Acquire Shaw's Supermarkets

BOISE, Idaho - Albertson's Inc. today announced that it has entered into a definitive stock purchase agreement to acquire JS USA Holdings Inc., which operates under the banners of Shaw's and Star Markets. Currently the 11th largest supermarket company in the U.S., Shaw's is a wholly owned subsidiary of J Sainsbury plc. Under the terms of the agreement, the total purchase price is approximately $2.475 billion. Included in the purchase price is approximately $368 million of capital lease assumption.

"We are excited about welcoming Shaw's and their 30,000 associates to the Albertsons family of world-class grocery banners," said Larry Johnston, chairman, c.e.o. and president of Albertsons. "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. Shaw's has earned an excellent reputation for quality and service with New England consumers and holds No. 1 or No. 2 shares in each of its major markets.

Johnston noted that Shaw's has delivered positive comparable store sales for the past two years in light of a challenging economy and intense competition.

Paul Gannon, Shaw's c.e.o. and president, said: "We believe this exciting, new relationship with Albertsons will be beneficial for both companies and allow Shaw's to retain its leadership position in the New England marketplace. Our customers, associates and vendors should be assured we are working toward a seamless transition. This is a win-win for both companies."

Albertsons said the acquisition of Shaw's is expected to be accretive to its 2004 earnings guidance of $1.30 to $1.40 per share. Following closing, the company will announce specific details of the transaction and provide dimension to the positive impact expected on its earnings guidance.

To finance the Shaw's acquisition, Albertsons said it expects to use a combination of sources including equity, debt and cash on hand, plus the assumption of approximately $368 million in capital leases.

The closing is subject to terms and conditions including government approval. The parties said they currently anticipate consummating the transaction in the second quarter of 2004.

Albertsons, one of the world's largest food and drug retailers with annual revenues of over $35 billion, operates more than 2,300 retail stores in 31 states across the United States, under banners including Albertsons, Jewel-Osco, Acme, Albertsons-Osco, Albertsons-Sav-on, Sav-on Drugs, Osco Drug, and Super Saver.
This ad will auto-close in 10 seconds