Saturday, November 22nd0.6°C
24124
23088

Safeway agrees to sell company to group led by Cerberus Capital for at least $7.64 billion

Safeway has agreed to be acquired by an investment group led by Cerberus Capital Management, the owner several supermarket chains.

The acquisition is worth about $7.64 billion in cash, and pending other transactions could top more than $9 billion.

The deal, announced late Thursday, will bring together Safeway and Albertsons, one of the five chains that Cerberus bought from Supervalu Inc. last year.

It comes amid ongoing consolidation in the supermarket industry, which is facing growing competition from big-box retailers, specialty chains, drug stores and even dollar stores. Kroger Co., a key competitor, recently snapped up regional chain Harris Teeter.

Safeway said in February that it was looking into putting itself up for sale. The Pleasanton, Calif.-based company has been trying to adapt for some time to increased competition and recently shed some of its smaller, less profitable units, such as its Canadian operations and Dominick's stores in Chicago.

The company has more than 1,300 U.S. locations under banners including Safeway, Vons, Pavilion's, Randall's, Tom Thumb and Carrs.

AB Acquisition LLC, which operates Albertsons, along with Acme, Jewel-Osco, Lucky, Shaw's and other stores, is owned by Cerberus and other investors. It operates more than 1,000 stores. Albertsons is based in Boise, Idaho.

Combined, the companies will have more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants.

Safeway and Albertsons say the deal will allow them to better respond to customer needs and lower costs. They also expect to refurbish some stores and expand its product offerings once it is complete.

The deal is expected to close in final three months of this year. It still needs the approval of Safeway shareholders and federal regulators.

Safeway shareholders will receive $32.50 per share in cash. Pending other actions, the company says the deal is worth roughly $40 per share to stockholders.

Shares of Safeway Inc. closed at $39.47 Thursday. Its shares closed at $34.10 on February 18, the day before Safeway announced it was in talks regarding a potential sale.

The stock fell $1.33, or more than 3 per cent, to $38.14 in extended trading after the deal was announced Thursday.

Bob Miller, the current CEO of Albertsons, will become executive chairman of the combined business. Robert Edwards, Safeway's president and CEO, will become president and CEO of the combined company.

The companies said it is too early to determine where it will be based and exactly what its operations will look like following the deal. It does not anticipate any store closings.

Safeway can still actively review other proposals in the coming weeks.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15111.13+35.95
S&P CDNX789.135.56
DJIA17810.0691.06
Nasdaq4712.97+11.102
S&P 5002063.50+10.75
CDN Dollar0.8901-0.0002
Gold1201.50+10.60
Oil76.72+0.87
Lumber331.50+4.50
Natural Gas4.236-0.253

 
Okanagan Companies
Pacific Safety0.155-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.30+0.03
Cantex0.04+0.005
Anavex Life Sciences0.178+0.008
Metalex Ventures0.03+0.005
Russel Metals31.62+0.82
Copper Mountain Mining2.24+0.06
Colorado Resources0.125-0.015
ReliaBrand Inc0.013-0.002
Sunrise Resources Ltd0.050.00
Mission Ready Services0.35+0.015

 
23744




FEATURED Property
2086497590 HOLLYDELL Road
4 bedrooms 2 baths
$379,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...


Retirement: Health Issues

Our health is really our greatest asset and maintaining our health is of tremendous importance. You want to do what you can to ensure that health issues will not jeopardize the enjoyment of your retir...


Be quiet already!

No, you’re not crazy. There really are voices in your head. Voices that keep you from doing what you need to do during your customer care calls. It can be the voice of your teachers, your parent...

_



24156

24207


Member of BC Press Council


22842