Sav-On Name to Be Dropped

The Sav-On name will soon disappear now that the drugstore chain’s parent company, American Stores, has formally approved a restructuring under which the 184 Sav-On stores in California will be absorbed into a separate division called Osco.

In a statement Tuesday, American Stores, based in Salt Lake City, said that it will continue “as the holding company it is now” but that its businesses will be grouped into three areas to achieve a “more decentralized” operation.

In addition to the national drug operation, to be known as Osco Drug Inc., the segments will consist of a Western food group, including Alpha Beta and Skaggs Alpha Beta, and an Eastern food operation, made up of Acme Markets, Jewel Food Stores and Star Market. The coast-to-coast Osco operation will have about 645 stores, including Sav-On.

Sav-On customers have already seen the Osco name on various products in the last few months. The formation of the nationwide chain, which industry observers say will be completed by October, is expected to result in economies in distribution and advertising.

Details of the restructuring were contained in a letter mailed Tuesday to shareholders in which American Stores also announced that it has declared a “poison pill” defense that would enable shareholders to buy shares at half-price in any company attempting a hostile takeover. The company said the share purchase rights, to be issued Aug. 25, “are not being distributed in response to any specific effort to acquire control of the company.”