BOISE, Idaho — Food and drug retailer Haggen Inc., under Chapter 11 bankruptcy protection since last fall, is slated to become part of Albertsons LLC.
Albertsons said late Monday that it has submitted a binding bid letter and form of asset purchase agreement to Haggen to acquire the retailer’s 29 core stores in Washington and Oregon. Plans call for the creation of a separate business unit for 14 Haggen stores — part of the original Haggen store chain — that would continue to be operated from Bellingham, Wash., under the Haggen name, and for a former Safeway location in Oak Harbor, Wash., that was converted to a Haggen location last year.
The other 14 stores, which Haggen acquired from Albertsons in early 2015, would be transitioned back to the Albertsons banner, with six to be operated by Albertsons’ Seattle division and eight by its Portland division.
Albertsons reported that it obtained antitrust clearance for the acquisition last week and that it expects to close the transaction in the coming weeks, pending legal and bankruptcy court approvals.
“Haggen’s original core group of Pacific Northwest stores set the gold standard in the markets they serve for quality, fresh products and exceptional service,” Albertsons chairman and chief executive officer Bob Miller said in a statement. “We are proud to now be associated with this tradition and want to assure Haggen’s dedicated shoppers that the stores will continue to offer customers the freshest local products available and exceptional service, with the same great employees at the stores.”
Albertsons added that it plans to hire substantially all store employees and honor current labor agreements to staff the stores.
“We are excited about the opportunity to have the backing of Albertsons and look forward to be part of the Albertsons grocery family. Haggen has been a part of the Pacific Northwest and the Bellingham community for more than eight decades, and we will continue the traditions of operating great Haggen stores focused on community involvement, fresh northwest products and great service,” Haggen CEO John Clougher stated.
Haggen reported that the bankruptcy court will consider approval of the sale agreement on March 29.
The transaction marks an ironic twist for Haggen. In October 2014, the retailer announced that it agreed to buy 146 supermarkets from AB Acquisition LLC, the parent of Albertsons, and Safeway Inc., which had to divest stores to proceed with their merger. The purchase, which was closed in January 2015, transformed Haggen from a small chain of 18 stores with 16 pharmacies in Washington and Oregon to a multistate retailer of 164 stores with 106 pharmacies mainly in Washington, Oregon and California but also in Nevada and Arizona, where consumers were unfamiliar with the banner.
Then last September, Haggen filed for Chapter 11 bankruptcy protection, after struggled since expanding into California via the acquisition of the Albertsons and Safeway stores. The filing also came in the wake of lawsuits, with Haggen claiming Albertsons was engaged in anti-competitive efforts against it and Albertsons suing Haggen for allegedly not paying for merchandise in the stores it acquired.
In November, Albertsons also had acquired 30 former Haggen stores in California, Washington, Arizona, Nevada and Oregon. All of the stores were former Albertsons, Safeway or Vons stores that had been sold to Haggen.
Overall, Albertsons now operates more than 2,200 supermarkets and about 1,760 pharmacies in 36 states and the District of Columbia under 18 banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market and Carrs.