Albertson’s looks Northeast

David Altaner

Friday, March 26, 2004 | 9:11 a.m.

J Sainsbury Plc, the U.K.'s third-largest food retailer, said it will sell the Shaw's Supermarkets unit to Albertson's Inc. for $2.48 billion to exit the U.S.

The sale will give Albertson's, the second-largest U.S. food retailer after Kroger Co., about 200 stores in the Northeast. The Boise, Idaho-based grocer said the purchase will boost its per-share profit, which it estimates at $1.30 to $1.40 this year.

Sainsbury is focusing on Britain after its market share fell below Wal-Mart Stores Inc.'s Asda chain in 2003.

Stock in Albertson's fell 44 cents, or 1.9 percent, to $22.22 at 10:25 a.m. in New York Stock Exchange composite trading. The shares have advanced 15 percent in the past year, compared with Wal-Mart's 12 percent climb.

Sainsbury, which is focusing on Britain after its market share fell below Wal-Mart Stores Inc.'s Asda chain in 2003, decided to sell Shaw's and focus on the U.K. because competition is increasing in the northeastern U.S. as Wal- Mart and Costco Wholesale Corp., the biggest U.S. warehouse-club chain, open stores there, the company said.

The British food retailer said it will get cash proceeds of $2.1 billion from the Shaw's sale. Albertson's will take on $368 million of store leases.

Sainsbury Finance Director Roger Matthews said declines by the dollar wouldn't affect the proceeds. "We've had $1.7 billion of U.S. debt, which provides a very effective hedge," he said.

In Las Vegas, Albertson's operates about 70 Albertsons grocery stores and Sav-on Drugs stores. The company is one of the valley's largest employers, ranking 16th with its more than 4,200 employees.