Albertsons Pursuing Merger with Sprouts?

Albertsons Cos. is reportedly in preliminary merger talks with Sprouts Farmers Market.

These early-stage discussions have involved a plan to take organic grocer Sprouts private and add it to the Albertsons’ family of stores, Bloomberg reported.

Diego Romero, communications manager for Phoenix-based Sprouts, told PG that, “as a company practice, we do not comment on rumors or speculation regarding our business.” Likewise, Christine Wilcox, VP of communications and public affairs for Boise, Idaho-based Albertsons, declined to comment.  

"If a deal gets done, Albertsons would benefit from the higher-end Sprouts' customer," noted Robert Costello, Jr., president of Feasterville, Pa.-based Costello Asset Management Inc. "Sprouts' stores tend to be located in high population areas and has posted higher sales growth and profit margin that most U.S. food retailers. Sprouts would also improve the investment profile whenever Albertsons is taken public," Costello added.  

Earlier this year, Albertsons was said to be pursuing an acquisition of New York-based Price Chopper. 

Backed by Cerberus Capital Management, the Albertsons network includes its own banner as well as Safeway, Jewel-Osco, Shaw’s and Acme.

Cerberus invested in Albertsons in 2006, then in 2013 bought most of Supervalu Inc.’s retail banners that the Minneapolis-based operator had earlier acquired from Albertsons. Two years later, Albertsons completed its $9.2 billion acquisition of Safeway.