Safeway Inc. and Albertsons have announced a definitive agreement under which AB Acquisition LLC will acquire all outstanding shares of Safeway. The merger agreement was unanimously approved by the Board of Directors of Safeway.
AB Acquisition is the owner of Albertson’s LLC and New Albertson’s, Inc. and is controlled by a Cerberus Capital Management, L.P.-led investor group, which also includes Kimco Realty Corporation, Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.
Safeway shareholders are expected to receive total value estimated at $40 per share.
Albertsons’ Chief Executive Officer Bob Miller stated, “This transaction offers us the opportunity to better serve customers by adapting more quickly to evolving shopping preferences in diverse regions across the country. 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 percent from one year ago, and 56 percent over the share price six months ago,” said Robert Edwards, President & Chief Executive Officer 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.”