American Stores Co. said Friday it has agreed to sell the stock of Alpha Beta Co. and 145 of its stores to Pasadena, Calif.-based Food 4 Less Supermarkets Inc. for $248 million, a move that will end its anti-trust battle with the California attorney general that began after it acquired Lucky Stores in 1988 for $2.5 billion.
American said the sale will include 145 Alpha Beta stores in the Los Angeles area. It will retain 15 stores in San Diego County that it will operate as Lucky Stores.Salt Lake City-based American Stores also will retain ownership of the Alpha Beta warehouse and office complex in La Habra, Calif., and four stores, which will be leased to Food 4 Less for a period of up to 25 years.
The $248 million selling price consists of $237 million in cash and the assumption of $11 million in lease obligations.
American Stores has been divesting itself of various operations for some time.
On March 27, the company said it would sell its 51 Osco drugstores in Utah, Colorado and Wyoming to Pay Less Drug Stores of Wilsonville, Ore., for $60 million, thus terminating all of its retail operations in Utah. Last August, the company closed its four Skaggs Home Improvement Centers in Utah; in February 1990, American closed its last eight Skaggs Alpha Beta grocery stores in Utah.
Last May, American Stores and California officials reached a consent decree under which American was allowed to continue operating Lucky Stores, but was required to sell most of Alpha Beta's stores in Southern California.
As part of the decree, American said it has also integrated 56 Alpha Beta stores in California, four Alpha Beta stores in Las Vegas and the Alpha Beta Sunrich warehouse in Fullerton, Calif., into its Lucky operations.
Alpha Beta President J.L. Scott acknowledged the uncertainty caused by the litigation, that went all the way to the Supreme Court, has been hard on employees.
"We would like to extend our gratitude to the employees of Alpha Beta," said Scott. "Through this long and difficult process they have continued to demonstrate pride in their work and a dedication to serving their customers. "While it was not our original intention to sell Alpha Beta, we are pleased with the terms of the transaction and believe we received a fair price for the company."
He said the agreement "ends all requirements and prohibitions of the previous consent decrees with the California attorney general."
Following the sale of Alpha Beta, American Stores will operate 1,700 stores in 35 states, including 408 Lucky stores in California.
American said Food 4 Less has made financing arrangements for the acquisition. Closing is expected to take place in July.
Upon the sale, all other provisions resulting from the litigation and consent decree will terminate or will soon expire, the company said.