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Safeway Sold for About $9.4 Billion

    March 7, 2014
    Kathy Karadza
    Comments are off for this post.

Safeway Inc., the second largest U.S. grocery store chain, said Thursday it agreed to be acquired by the supermarket chain Albertson’s, which is backed by the private equity firm Cerberus Capital Management, for about $9.4. billion.

Albertson’s offer price was $40 per share, which is a little upside overall from current market share prices. Safeway closed at the New York Stock Exchange at $39.47 Thursday.

The deal merges Safeway with Albertson’s stores, creating a network of more than 2,400 grocery stores and 250,000 employees.

No store closures are expected.

Cerberus purchased Albertson’s and Jewel-Osco from Supervalu in early 2013 for $3.3 billion, and is pushing ahead with acquiring additional supermarket property with the deal with Safeway. The company’s off of $40 per share includes an offer of $32.50 in cash to shareholders, plus other distributions at an estimated value of $3.65 per share, and a distribution of stock in Blackhawk Network Holdings worth $3.95 a share.

Black Hawk Networks Holdings is the gift card provider which Safeway traded off last year into a publicly traded company in an effort to streamline its operations.

The deal reportedly indicates that Safeway will consider other offers superior to Albertson’s $40 per share deal for the next 45 days. Kroger, another supermarket giant, has been reported as a possible buyer.

Safeway Inc. also made headlines Thursday afternoon after agreeing to pay $2.25 million to settle a consumer protection action suit in California. The company was fined for false adverting, pricing discrepancies, failing to honor coupons, and false claims of “locally grown” produce.

According to the settlement, Pleasanton’s Safeway must “clearly and conspicuously disclose any inclusions, exceptions or limitations to any Safeway offers, coupons or discounts,” according to the settlement.

The chain, which had revenues of $36 billion in 2013, will be managed under Albertson’s once the sales deal is complete.

Image via Wikimedia Commons

  • Cate Stone

    Albertsons is the most expensive store in Las Vegas. They are 5 times higher than Walmart or Food 4 Less. I stopped shopping there over 15 years ago. They are way out of line on everything. And I thought Vons was expensive. Now that Safeway has been bought out from Albertsons, it can only get worse.

  • Rob Singer

    Teddy Roosevelt was known for trying to break up the monopolies and trusts in America so that fair business competition was available.

    Some of his successors in government carried on his work, somewhat unsuccessfully. Chief among these was US President Woodrow Wilson.

    John Davison Rockefeller Senior who founded Exxon / Standard Oil of New Jersey, Standard Oil of Ohio, and all sorts of other oil companies got into the business of banking, and eventually took over J. P. Morgan’s interests after Morgan died. In addition, J. D. Rockefeller Sr. and his son Jr. got involved with drug manufacture, funding of universities and colleges, funding of science and medicine research, germ warfare research, and bribing politicians to pass laws that he wanted. Rockefeller operated what are known as trusts that would suppress competition by stealing lands, bribery, borrowing huge sums of unsecured loans

    from the Rothschild banking family in Europe to buy out his competition, and bribery to arrange that railway operators charge increased pricing for shipping competitor goods while passing the savings on to his company by shipping his goods for free.
    In the Ludlow massacre of 1913-1914 J. D. Rockefeller Jr. was involved in ordering the Governor of Colorado to send troops in to quell a miner’s strike at the Colorado Fuel & Iron Company (CF&I), the Rocky Mountain Fuel Company (RMF), and the Victor-American Fuel Company (VAF) that ultimately forced the massacre of many families. When the families were forced from their Rockefeller company provided shanty shack town, they setup a tent colony site. That site was set on fire while troops open fire with all manner of guns. Wives and children of workers had the choice of staying ducked down in the fire that was burning or trying to get up and run through the gun fire of the soldiers. The true story of the massacre was told in the writings of only a few brave authors’ books whose both publication and distribution were suppressed by the huge monopoly powers wielded by the Rockefellers and their rich friends.
    this where we get the free trade agreement in america to day