Sale of supermarkets taking a while to cook
SMU Law Professor Paul Rogers, who specializes in antitrust, says the sale of grocery store chains involves a lot of negotiating.
By MARIA HALKIAS
Safeway shareholders are expected to approve the sale of the company to Albertsons on Friday. But that doesn’t mean the grocers are free to merge their operations just yet.
The vote will be straightforward, but the antitrust review that’s still in the works is likely to be much more complicated. The deal — the biggest acquisition in the supermarket business in some time — is expected to close in the fourth quarter.
Albertsons, which is owned by private equity firm Cerberus Capital, offered to buy Safeway in March to create the second-largest U.S. traditional supermarket chain behind Kroger. Albertsons offered $7.6 billion for Safeway’s 1,300 supermarkets, including 106 in Texas that operate as Tom Thumb and Randalls.
Right now, the biggest decisions about the merger are being made in Washington. Federal regulators are putting the companies through antitrust review, examining market dominance, one neighborhood at a time in some cities.
In a case this size, it’s a complicated process to decide which stores have to be sold, Southern Methodist University antitrust law professor Paul Rogers said.
The largest overlapping markets for the two retailers are Los Angeles; Seattle; San Diego; Portland, Ore.; Phoenix; and Dallas-Fort Worth.
“There’s a lot of negotiating that takes place, formally and informally,” Rogers said. “But the retailer isn’t able to dictate which stores they sell.”
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