Tesco mulls entry into US with Albertsons bid

Published on 04/09/2005 00:04

TESCO is being linked with a potential bid for Albertsons, the second-largest grocery group in the US.

Albertsons operates stores including Albertsons, Jewel-Osco and Shaw's and has hired Goldman Sachs and Blackstone Group to explore strategic options, including a sale.

Tesco, the UK's number one supermarket group, has previously played down its interest in entering the American retail market.

But analysts point out that Tesco has been expanding overseas as it seeks fresh revenue streams and believe it is unlikely that it will pass up the opportunity of entering the lucrative US market without taking a look.

Neil Stern, a senior partner with retail consultants McMillan Doolittle, said: "Tesco is the premier retailer in the world right now and they're not represented in the United States. They have proven that they can compete with Wal-Mart."

Other European groups, including Belgian retailer Delhaize Group and France's Carrefour, are also tipped as potential suitors, along with US private equity groups.

Analysts said that US competitors were unlikely to join in the bidding because of potential competition issues, unless the business is split up and sold in parts.

Tesco has been expanding overseas in recent years and operates in 12 countries including Hungary, Poland, Taiwan and Thailand. It operates 2,319 stores and employs around 326,000 staff.