UK supermarket operator is to sell its US arm Shaw’s to US retailer Albertsons for US$2.5bn.
The announcement came as Sainsbury’s said that intense price competition at home would hit profits this year and next, sending shares down nearly 6% to 265 pence (US$4.82). Underlying profits for the year to 27 March are expected to lag behind the £695m generated last year.
Sainsbury’s said the sale of Shaw’s would allow it to focus resources on its UK stores, which have been struggling against heightened competition from Wal-Mart subsidiary Asda and UK leader Tesco.
For Albertsons the acquisition of Shaw’s, the 11th-largest supermarket company in the US, means the company will have more than 2,500 stores in 37 states. The companies expect the transaction to close in the second quarter. The transaction is subject to terms and conditions including government approval, the companies said. The price tag attached to the deal is reported to include $368m of capital-lease assumption.
