Tengelmann's buys and sells as part of strategic transformation

The Great Atlantic & Pacific Tea Co Inc (A&P), part of the Tengelmann Group, plans to sell 19 of its Sav-A-Center stores to Rouses Supermarket. Two other Sav-A-Center units are being sold to unknown independent food retailers. The stores are all located in the New Orleans, Louisiana area, situated in the Southern US.

The plan of A&P to ricochet Sav-A-Center stores is the final stage in the company's plan to exit non-core markets. A&P is concentrating its retail operations fully in the Northeast. Eric Claus, President & CEO of A&P stated, "This marks a critical step in A&P's strategic transformation." All current Sav-A-Center associates will be offered positions by new owners. Transfer of ownership of all stores is expected to be completed around November 2007.

Earlier this year A&P started liquidating the inventory in 41 of its 66 Detroit-area Farmer Jack locations, as it prepares to sell or close the stores. The company also announced an agreement to acquire Pathmark Stores Inc., also based in the Northeast. The transaction is currently under FTC review and is expected to be completed during the second half of A&P's fiscal year 2007.

If the A&P-Pathmark deal is approved, it will create a 550-store chain operating in the New York, New Jersey, Washington-Baltimore, Detriot and Philadelphia metropolitan areas. As part of the deal, A&P will assume an undisclosed amount of debt, taking the combined value of the deal to about US$1.3 billion. After the deal is completed, A&P shareholders will own 86% of the company and former Pathmark shareholders will hold 14%.