American Stores - Acquisition By Albertsons

Acquisition By Albertsons

At the company's June 17, 1998 annual meeting of shareholders in Salt Lake City, Utah, American Stores highlighted its accomplishments over the past year and its plans for the sustained long-term growth. In his keynote address, chairman and chief executive officer Victor L. Lund said, "During the past year, we have transformed many of our key plans for the future to reality. We are confident that our plan for growth is working and is squarely on track. We've set our sights very high because we know our visions of tomorrow will be achieved". A day earlier, American Stores had held a ceremony marking the opening of the American Stores Center, its 24 story corporate office building in downtown Salt Lake City, Utah. The building had a company-owned Italian restaurant, Il Sansovino and a convenience store, the The American Store, on the ground level floor.

Six weeks later, on August 3, 1998 it was announced that Albertsons would acquire American Stores for $11.7 billion. Soon after the announcement, the Federal Trade Commission charged that Albertsons' proposed acquisition of American Stores would substantially lessen supermarket competition in California, Nevada and New Mexico. The proposed acquisition, the FTC charged, could result in higher prices or reduced quality and selection for consumers. As a condition of the sale, Albertsons's and American Stores agreed to sell 144 supermarkets (104 Albertson's supermarkets, 40 American Stores' Lucky supermarkets) in 57 markets in order to resolve. The divestiture agreement, was the largest retail divestiture ever required by the Federal Trade Commission. Due to the mandated sale of stores, the acquisition took nearly a year to complete. In June 1999, the acquisition was complete, ASC was de-listed on the New York Stock Exchange and American Stores ceased to exist.

During 1999, the drugstore operations division and general merchandise procurement functions were moved from Salt Lake City, Utah to Scottsdale, Arizona operating as Albertsons Drug Region. The functions which supported the food divisions were consolidated and moved from Salt Lake City, Utah to Albertsons headquarters in Boise, Idaho. For a short time after the acquisition of American Stores, Albertsons leased several floors of the American Stores Center building to the International Olympic Committee - Utah had been awarded the 2002 Winter Olympics. The building is now owned by Wells Fargo.

For a very short time after the American Stores acquisition was completed, Albertsons was the largest food/drug chain in the United States operating nearly 2,500 stores in 40 states. Albertsons preserved the Acme Markets, Jewel-Osco, Osco Drug and Sav-on Drugs namesakes. Shortly after the sale, Albertsons rebranded the Lucky stores under the Albertsons name because both chains had stores and overlap in northern and southern California. (The Lucky brand would be revived in 2006 by SuperValu).