Albertsons owner buying Safeway for $9 billion

Safeway says it has agreed to be acquired by an investment group led by Cerebus Capital Management, the owner of Albertsons and several other supermarket chains.

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

Albertsons Vice President of Communications, Chris Wilcox said the company does not expect any store-level layoffs as a result of the sale, no stores are expected to close and the Safeway brand may not go away.

"These are strong brands, and we have no current plans to change them, subject to customary government approvals," Wilcox said.

Safeway shoppers who spoke with ABC15 are concerned about what their grocery bills will look like after the merger.

"At Albertsons their prices are higher than Safeway, you do get a better deal here," said Esther Mata.

Darion Kootswautewa says the sales he sees at Albertsons are not as appealing as Safeway because you have to buy a set amount to see a savings.

"It'll have a saving, but you'll have to buy so much more to save, here (Safeway) you don't have to buy five or ten of anything," Kootswautewa said.

Wilcox says the merger will help lower prices for customers.

"We expect the cost-savings that result from this deal will enable us to make a strong investment in improving our stores and lowering prices across a wide range of products," Wilcox said. The deal comes with consolidation in the supermarket industry, which is facing growing competition from big-box retailers, specialty chains, drug stores and even dollar stores.

Cerberus bought five chains including Albertsons and Jewel-Osco from Supervalu Inc. last year. Kroger Co. also recently snapped up regional chain Harris Teeter.

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

Shares of Pleasanton, Calif.-based Safeway Inc. closed at $39.47 Thursday.

 

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