Albertson’s Owner Buys Safeway

The owner of Albertson’s grocers, AB Acquisition (which is controlled by the investor group Cerberus Capital Management), has announced plans to buy competitor chain Safeway in a transaction valued at $9 billion.

AB Acquisition will pay just around $40 a share for all outstanding shares of Safeway stock.

The merger, which is expected to close in the fourth quarter, will create a network that includes more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants with 250,000-plus employees. No store closures are expected. 

Stores under the Safeway banner include Vons, Pavilions, Randalls, Tom Thumb, Carrs, Albertsons, ACME, Jewel-Osco, Lucky, Shaw’s, Star Market, Super Saver, United Supermarkets, Market Street and Amigos.

The leaders of both companies say the merger will allow implementation of operational best practices that will lead to an enhanced shopping experience, more competitive prices and better customer service.

“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, Albertson’s. “It also brings together two great organizations with talented management teams. 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.”

Bob Miller, Albertsons current chief executive officer, will become executive chairman. Robert Edwards, Safeway’s current president and chief executive officer, will become president and chief executive officer of the combined company.

“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,” says Edwards. “We are excited about continuing this momentum as a combined organization.”