Albertsons owner to acquire Safeway
BOISE, Idaho — Albertsons, a business unit of Cerberus Capital Management LP, has entered into an agreement to acquire retailer Safeway, Inc., Pleasanton, Calif., for an estimated total purchase price of $9 billion.
Under the merger agreement, Safeway
shareholders will receive $32.50 per share in cash. Additionally, shareholders will have the right to receive pro-rata distributions of net proceeds from primarily non-core assets with an estimated value of $3.65 per share. The proceeds are from the sale of the assets of the real-estate development subsidiary Property Development Centers, LLC, which is comprised of a shopping center portfolio that includes certain related Safeway stores, and the monetization of Safeway’s 49 percent equity interest in Mexico-based food and general merchandise retailer Casa Ley, S.A. de C.V.
“This transaction offers us the opportunity to better serve customers by adapting more quickly to evolving shopping preferences in diverse regions across the country,” said Bob Miller, CEO of 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.”
The merger will create a network that includes more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants with approximately 250,000 employees. Retail banners included in the network will be Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Albertsons, ACME, Jewel-Osco, Lucky, Shaw’s, Star Market, Super Saver, United Supermarkets, Market Street and Amigos. Albertsons said no store closings are anticipated.
Miller, will become executive chairman of the new organization, and Robert Edwards, Safeway’s current president and CEO, will become president and CEO of the combined company.
The transaction is estimated to be completed by the fourth quarter of 2014.