A&P Buys Pathmark
Supermarket giant A&P is buying Pathmark in a deal that would create an $11 billion-a-year food chain.
The company, known officially as the Great Atlantic & Pacific Tea Co., agreed to pay $679 million in cash and stock and assume debt that will value the overall transaction
at $1.3 billion.
The deal will create a 550-store powerhouse, operating in the New York, New Jersey and Philadelphia metro areas as well as in Michigan, Louisiana and the Baltimore-Washington area.
It was unclear if there would be layoffs or store closings, although the companies said they expect annual savings of about $150 million within two years.
Pathmark stores will retain their name and format under the deal, but administrative and management functions will be consolidated at A&P’s headquarters in Montvale, N.J. Pathmark’s headquarters are in Carteret, also in northern New Jersey.
“By bringing these two great brands together, and by drawing on the strength of Pathmark’s tradition and strong customer franchise in our Northeast region, we have the opportunity to establish an entity that appeals to a very diverse customer base, offering a breadth of products and services,” said A&P CEO Eric Claus.
A&P has nearly 43,000 employees and 410 stores in New York, D.C. and eight other states.
Its stores include A&P, founded in 1859, as well as Waldbaum’s, Food Emporium, Super Fresh, Farmer Jack, Sav-A-Center and Food Basics.
Pathmark, founded in 1968, has more than 27,000 employees and operates 141 supermarkets in New York, Delaware, New Jersey and Pennsylvania, all within 100 miles of its northern New Jersey headquarters.
Pathmark has posted losses in its last seven quarters.
Pathmark shares rose $1.21, or 10%, yesterday to $12.46.
A&P gained $1.64 to $32.50 in regular trading, but fell 9 cents in after-hours activity.
Source: Daily News/AP
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