Albertson's Parent Company Cerberus Buys Safeway

Pleasanton-based Safeway has reached a preliminary deal to be sold for more than $9 billion to the private equity firm Cerberus Capital Management, the owner of Albertsons and several other supermarket chains.

After a less than stellar net earnings in the fourth quarter of 2013, Safeway had announced in February that they may be looking for a buyer.

In a phone interview on Thursday, Safeway executives said the merger will bring Safeway shareholders $40/share. "We believe this will be a very positive outcome for not only our investors but also our customers," said CEO/President Robert Edwards. He will stay on board as President/CEO of the new, combined company and current Albertson's CEO/President will become Executive Chairman.

"Our customers will see a better assortment of products to meet local needs, lower prices and an improved shopping experience," continued Edwards. "Combined we now have the opportunity to take the business to the next level which will enable lower consumer prices to compete."

Loyalty cards are currently in use at Safeway and not at Albertson's. No decisions have been made on how the company will handle the cards when the transaction closes at the end of 2014. "We will combine the best of both companies," Edwards said. Stores will operate independently until then.

There are two Safeway Stores in the South Lake Tahoe / Stateline area. Albertson's was once in town, occupying the current Ross store until it's closure. The future of the local stores is unknown and inquiries are being referred to the corporate offices in Pleasanton, CA. Store closures will be evaluated case by case, especially where Von's, Safeways and Albertsons would compete with each other. The Federal Trade Commission review of the merger may require divestitures.

Safeway Inc, which operates Safeway, Vons, Pavilions, Randall's, Tom Thumb, Carr's/Safeway, is a Fortune 100 company and the 2nd largest grocery chain in the country.

According to Edwards, the combined company will have over 250,000 employees, 2,400 stores in 34 states and the District of Columbia, 20 manufacturing plants and 27 distribution facilities.