Supermarket chain Albertsons Cos. is purchasing back 33 stores the government asked it to sell when the company procured rival Safeway Inc. prior this year. The Federal Trade Commission permitted the Albertsons-Safeway tie-up in January on the condition that the organizations sell 168 stores to save rivalry in a few Western states. Sans divestitures, Albertsons would be excessively overwhelming in 130 nearby markets; the FTC said when it consented to a settlement with the consolidating organizations.
The vast majority of those stripped stores went to a little Pacific Northwest chain, Haggen Holdings LLC, which planned high level expansions with the new resources. The FTC trusted Haggen would serve as aggressive check against Albertsons, keeping the post merger firm from raising costs.
Rather, Haggen, which turned out to be about nine times bigger overnight, attempted to make the new stores work. It petitioned for chapter 11 inside of months and slated more than 100 of the recently acquired stores for conclusion, undermining employments and leaving customers and suppliers with limited outlets.
It likewise put the FTC in an intense spot. Contending food merchants have lined up in chapter 11 procedures to buy a percentage of the Haggen stores however not all stores. In a few circumstances, it implied that if Albertsons didn’t take them back, nobody would.
In zones where there was no option purchaser, “it is better for customers that Albertsons work a store, so we have not protested Albertsons purchasing back stores that other grocery store administrators were not intrigued by,” said FTC representative Betsy Lordan.
Robert Feinstein, legal counselor for the official board of trustees of unsecured loan bosses in the Haggen case, included that “there was a genuine danger no one would purchase these stores, in which case they would go dull, sell, and it would be a fiasco.” A government chapter 11 judge affirmed the deals to Albertsons on Tuesday.