USA's second largest supermarket chain, Safeway, is being sold to an investment group led by private equity firm Cerebus Capital Management, for a reported $9.4 billion.
Under the terms of the deal, Safeway will merge its brands with that of Albertsons, which is the fifth largest grocer in the US. Idaho-based Albertsons is also owned by Cerebus, and operates more the 1,100 stores under the Acme, Jewel-Osco, Albertsons ans Shaw's brands.
The new merger will have a total store count of just over 2,400.
The Cerberus bid is worth $40.10 a share. Stockholders will receive $32.50 a share in cash.
Safeway CEO Robert Edwards is to become CEO of the new firm, while Albertsons CEO will become executive chairman.
"There is a clear and compelling rationale for this merger,'' Edwards said. "This merger will improve our competitive position."
The move is being seen by retail analysts in the US as a way of relieving the pressure being applied by major hypermarket and warehouse chains like Wal-Mart and Target, Costco, who are aggressively working to steal a substantial piece of the retail grocery market share.
© 2014 - European Supermarket Magazine by Enda Dowling
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