Dive Brief:
- Albertsons Cos. announced that it anticipates raising up to $1.84 billion in its initial public offering and will trade under the New York Stock Exchange ticker symbol "ABS." Plans for the IPO began in July, when the company initially estimated up to $100 million for the IPO.
- The IPO comes not long after the company merged with fellow grocery retailer Safeway Inc. under the management of private-equity firm Cerberus Capital Management LP. Together, the companies created the nation's second-largest grocery store chain (Kroger Co. is No. 1).
- Albertsons reported a loss of $1.2 billion on $27.2 billion in sales for the past fiscal year.
Dive Insight:
Albertsons and Safeway came together amid a tense atmosphere for conventional grocery retailers.
In addition to discounters and specialty health food stores, dollar stores are another source of competition for conventional grocery stores. Grocery stores had a 4% CAGR from the end of the decade as compared to 6.5% for dollar stores, according to John Rand, senior vice president of retail insights at Kantar.
In July, Albertsons said it would use proceeds from the IPO to pay down debt and make general corporate purchases. The retailer also said in its filing that it would open new stores and potentially acquire more companies to expand its store base.