Albertson's and Safeway's merger agreement brings the two grocery retailers under one umbrella
Safeway's board of directors accepted the agreement in collaboration with investing firm Cerebrus Thursday according to a press release.
"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," Bob Miller, CEO at Albertson's said in a statement.
"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," Miller said in a statement.
The new company will have more than 2,400 stores, 27 distribution facilities, 20 manufacturing plants, and 250,000 employees the press release reported.
Miller be the company's executive chairman, with Edwards presently Safeway's president, and CEO slated to stay in the same position, and oversee Safeway, Vons, Pavillion, Randalls, Tom Thumb, Carrs, Albertsons, ACME, Jewel-Osco, Lucky, Shaw's, Star Market, Super Saver, United Supermarkets, Market Street, and Amigos the press release reported.
"Albertsons has successfully transformed underperforming retail grocery stores into strong performers by focusing on enhancing the local customer experience," Lenard Tessler, co-head of global private equity and senior managing director at Cerberus. "Similarly, Safeway has consistently provided outstanding value and customer service throughout the communities it serves. Combining these strong management teams will strengthen the ability of Safeway and Albertsons to deliver on a shared commitment to offering customers higher quality products at lower prices, which will undoubtedly yield positive results for all stakeholders in the business."
The acquisition puts Safeway's shares at $32.50 a share in paper money the press release reported.
"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," Robert Edwards, president and chief executive officer at Safeway said in a statement.
"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," Edwards said in the statement. "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."
