- THE MAGAZINE
Safeway, Inc., Pleasanton, Calif., and Albertsons, Boise, Idaho, announced a definitive agreement under which AB Acquisition LLC, the owner of Albertsons, will acquire all outstanding shares of Safeway. Albertson's LLC and New Albertson's, Inc. are controlled by a Cerberus Capital Management, L.P.-led investor group, which also includes Kimco Realty Corp., Klaff Realty LP, Lubert-Adler Partners LP and Schottenstein Stores Corp.
"This transaction offers us the opportunity to better serve customers by adapting more quickly to evolving shopping preferences in diverse regions across the country,” says Bob Miller, chief executive officer for Albertsons. “It also brings together two great organizations with talented management teams. Robert Edwards and his team have done an outstanding job in positioning Safeway's core business for success, by investing in its stores and creating innovative strategic marketing programs that contribute to shareholder value. Working together will enable us to create cost savings that translate into price reductions for our customers. Together, we will be able to respond to local needs more quickly and deliver outstanding products at the lowest possible price, more efficiently than ever before."
"This merger is one of several actions we have taken in recent months as a result of our strategic business review. The combined value of the transactions described above is expected to deliver a premium to Safeway's shareholders of 72% from one year ago, and 56% over the share price six months ago," says Robert Edwards, president and CEO of Safeway Inc. "Safeway has been focused on better meeting shoppers' diverse needs through local, relevant assortment, an improved price/value proposition and a great shopping experience that has driven improved sales trends. We are excited about continuing this momentum as a combined organization. We look forward to working with Bob Miller and the rest of the Albertsons team as we proceed together on a path towards becoming an even stronger organization."
The merger will create a diversified network that includes more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants with over 250,000 dedicated and loyal employees. No store closures are expected as a result of this transaction.
Bob Miller, Albertsons current chief executive officer, will become executive chairman. Robert Edwards, Safeway's current president and CEO, will become president and CEO of the combined company. Banners will include Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Albertsons, ACME, Jewel-Osco, Lucky, Shaw's, Star Market, Super Saver, United Supermarkets, Market Street and Amigos.
The merger is expected to close in the fourth quarter of 2014 following the satisfaction of customary closing conditions, including approval of the merger by the holders of a majority of the outstanding shares of Safeway common stock and regulatory approvals, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.