QUINCY, Mass. -- Stop & Shop Cos. here last week entered into a definitive agreement to purchase Melmarkets/Foodtown, Garden City, N.Y., for $87 million.
Stop & Shop has also agreed to assume an unspecified amount of Melmarkets' long-term debt. The deal is expected to close later this year.
Melmarkets, which operates 17 stores in Nassau and Suffolk counties, recorded sales of $386 million last year. The chain is a member of the Edison, N.J.-based Twin County Grocers wholesale cooperative.
It could not be learned whether Melmarkets will continue to be supplied by Twin County. Executives from Melmarkets, Twin County and Stop & Shop could not be reached for comment.
The deal allows Stop & Shop to gain entrance to a market it has been trying to penetrate for at least several months: the New York metro area. The company has been attempting to secure store sites on Long Island, but has met with strong community opposition.
This purchase, combined with Stop & Shop's acquisition of Purity Supreme, North Billerica, Mass., should contribute to improved profits in the second half of 1996. Stop & Shop said it expects to complete its Purity acquisition shortly. A divestiture of 17 stores in Massachusetts will likely be required by the Federal Trade Commission and the state's Attorney General's office.