(Adds grocery industry background in graphs 5-8)
By Lawrence Delevingne and Lauren Hirsch
NEW YORK, March 19 Grocery business Albertsons
Cos held preliminary talks to merge with Sprouts Farmers Market
Inc, Bloomberg reported on Sunday, citing people
familiar with the situation.
Bloomberg said the early stage discussions took place in
recent weeks and involved a plan to take Sprouts private. Doing
so would add the natural and organic foods-focused business to
the Albertsons suite of supermarket brands, which includes
Safeway, Vons and Shaw's.
Albertsons is backed by private equity firm Cerberus Capital
Management. Representatives for Albertsons and Sprouts did not
immediately respond to requests for comment, while a spokeswoman
for Cerberus declined to comment.
Shares of Sprouts spiked to a four-month high on Thursday
and Friday amid a surge in stock options trading.
An acquisition of Sprouts would underscore the consolidation
sweeping the U.S. grocery industry, as regional chains struggle
to compete against online retailers such as Amazon.com Inc
, big box stores such as Wal-Mart Stores Inc,
and discount chains such as ALDI Inc.
Albertsons is one of the two most active industry acquirers
along with The Kroger Co.. A planned initial public
offering for Albertsons' has been delayed since October 2015. At
the same time, Krogers stock is up more than 140 percent over
the last five years despite falling 23 percent over the previous
Sprouts is among the niche retailers such as Fresh Market
Inc and Whole Foods Market Inc facing pressure from
Albertsons and Kroger, who now sell some of the same specialty
and organic products at lower prices.
Fresh Market was acquired by another private equity firm,
Apollo Global Management LLC, for about $1.36 billion in
cash in 2016.
(Reporting by Lawrence Delevingne and Lauren Hirsch; Editing by
Peter Cooney and Alistair Bell)