The private equity firm that owns Albertsons has gotten the green light from antitrust regulators to buy Haggen’s final core of Oregon and Washington stores..
It doesn’t necessarily mean a deal is done. However, a fund controlled by private equity giant Cerberus Capital Management told the Federal Trade Commission that it wants to buy Haggen’s core operations, and that the FTC said it wouldn’t block a deal, according to the agency’s website. If Haggen does end up under the banner of Cerberus and Albertsons, it would be an incongruous ending for a spectacularly failed bet by the Bellingham grocer. After all, it was from Albertsons (which was swallowing up Safeway) that Haggen last year acquired the 146 stores that propelled it into brief West Coast supermarket stardom.
Haggen, which filed for bankruptcy last September, since then has been closing or selling most of the newly acquired stores, with many going to Albertsons. Haggen retreated into a core of apparently profitable stores in the Pacific Northwest.
But even that was supposed be auctioned off, after repeated delays, on Friday. Now the auction has been pushed back from March 11 to March 18, according to documents filed with a bankruptcy court in Delaware.
Haggen has also filed court documents to close four stores — in Federal Way and Burien, as well as Clackamas and West Linn in Oregon — that it considers non-core but that it had kept operating. That would leave some 30 stores to be taken over by Albertson’s owner.
A local union representing Haggen workers, UFCW Local 367, was the first to disclose the FTC approval. “This news will hopefully end the uncertainty of our members and our comminities,” union president Denise Jagielo said in a statement.
Haggen and Cerberus declined to comment. Albertsons didn’t immediately return a request for comment.
If the Albertsons flag ends up flying over Haggen’s Bellingham headquarters, it could mean the disappearance of a local brand that dates back to 1933 (although the original family-owned company has been controlled since 2011 by a Florida-based private equity firm, the Comvest Group.)
It could also mean a big failure for antitrust regulation. Haggen was able to acquire the stores because the FTC forced Albertsons and Safeway to sell them in order to approve their merger to keep local competition alive.
But Albertsons began gaining strength — and even some monopoly situations — from Haggen’s failure to run its newly acquired empire. In Baker City, Oregon, it had sold one of the two supermarkets in town to Haggen (Albertsons owns the other). A few months later Albertsons bought it back. In several western Washington locations (Renton, Milton, Tacoma and Puyallup) there will be Albertsons and Safeways in close proximity to each other after similar buybacks.
The FTC says that while the original sale of Albertsons stores “did not lead to the full results we were looking for — a new supermarket competitor in each market area — most of the divested stores remain supermarkets.” It’s best for consumers that these stores continue operating, even under Albertsons’ brand or other operators, the FTC says.
Source: The Seattle Times