FTC Complaint Wants Sale of 6 Stores in A&P-Pathmark Deal

MONTVALE, N.J. - The Federal Trade Commission said yesterday it was challenging The Great Atlantic & Pacific Tea Company, Inc.'s proposed $1.3 billion acquisition of Pathmark Stores, Inc., claiming the merger would squelch competition in Staten Island, New York, and Shirley, Long Island, New York, unless the two parties sold six stores in those markets.

Under the terms of a consent order settling the FTC's charges, the commission said the grocers must sell four of A&P's Waldbaum's supermarkets and one Pathmark supermarket in Staten Island; and one Waldbaum's supermarket in Shirley, to commission- approved buyers by January 10, 2008.

"A&P and Pathmark are supermarket competitors in the highly concentrated areas of Staten Island and Shirley, Long Island, New York," said Jeffrey Schmidt, director of the FTC's Bureau of Competition. "Absent the relief provided by the Commission's consent order, consumers in these areas likely would face higher prices and lower levels of service when shopping for their weekly groceries."

The two companies have agreed to sell the Pathmark store and four Waldbaum's stores on Staten Island to King Kullen Grocery Company, Inc.; and the Waldbaum's store in Shirley The Stop & Shop Supermarket Company LLC, a subsidiary of Ahold NV. The consent order is pendiong final approval by the commission.

The grocery rivals had agreed on March 4, 2007, that A&P would acquire all of the voting securities of Pathmark for approximately $1.3 billion, including the assumption of debt.

A&P owns and operates about 316 supermarkets in Connecticut, Delaware, Maryland, New York, New Jersey, and the District of Columbia, under the A&P, A&P Super Foodmart, Food Basics, Food Emporium, Super Fresh, and Waldbaum's banners.

Pathmark, in Carteret, New Jersey, owns and operates about 141 supermarkets in Delaware, New York, New Jersey, and Pennsylvania, all under the Pathmark banner.

The consent order also prohibits A&P and Pathmark for 10 years from owning or leasing interests in any property that has operated as a supermarket within the prior six months in either Staten Island or Shirley.

FTC said the consent order is subject to public comment until Dec. 27, after which ist will decide whether to make the order final.
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