MUCH OF THE MERGER and acquisition activity in 2007 was the byproduct of other deals, including Whole Foods' acquisition of Wild Oats and the purchase of Pathmark by A&P.
A&P, readying itself for its purchase of Pathmark, sold off its holdings in Detroit and New Orleans. Kroger picked up 20 of A&P's Farmer Jack locations in the Detroit area, while many of the remaining Farmer Jacks went to local independents. In September, Rouse's, an independent based in Thibodaux, La., acquired A&P's Sav-A-Center chain in New Orleans.
Also that month, Los Angeles-based Smart & Final, which itself was acquired for $813 million earlier in the year by private equity firm Apollo Management, purchased 35 Henry's Farmers Markets and Sun Harvest natural food stores from Whole Foods as the merger with Wild Oats was completed. The Henry's acquisition included a perishables distribution center, fueling speculation that the purchase could help Smart & Final upgrade its perishables offering.
Supervalu's 2006 acquisition of Albertsons continued to have ramifications in asset exchanges that took place this year, as the company shed its Scott's banner in the Fort Wayne, Ind., market. Cincinnati-based Kroger, which already had a presence in the market, bought the 18-unit chain and shuttered four of the locations.
Associated Grocers of Seattle finally found a suitor in 2007, seven years after the company first said it had begun seeking strategic alternatives. Its acquisition by what was then known as Unified Western Grocers — it has since changed its name to Unified Grocers — created a massive wholesaler covering the entire West Coast. The deal added $900 million in volume from 325 new members to Unified's network.
The other big private equity deal of the year was the sale of Williamsville, N.Y.-based Tops Markets, which was picked up from Ahold for about $310 million by New York-based Morgan Stanley Private Equity.
Ahold continued to operate its Shop & Shop and Giant of Landover, Md., chains under a single umbrella — although it did divest itself of some of the stores that had served as a geographical bridge between the two chains. Elizabeth, N.J.-based Wakefern, supplier to the ShopRite cooperative, acquired 10 Stop & Shop locations in New York and New Jersey, some of which had previously been Giant Food locations and were only recently converted to Stop & Shop. Wakefern transferred most of the stores over to its individual members.