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By Meg Major and Kyle Shamorian
After nearly a year in the works, it's a done deal for the complex and often controversial Albertsons and Safeway merger, which has created a new private company operating 2,230 grocery stores in 34 states and the District of Columbia.
The terms of the deal will find Cerberus Capital Management-backed Albertsons acquiring all outstanding shares of Safeway, which also includes Kimco Realty Corp., Klaff Realty LP, Lubert-Adler Partners LP and Schottenstein Stores Corp.
Leaders of the new company have high hopes for an improved and invigorated shopping experience. "We plan to be the favorite local supermarket in every community we serve," said Robert Edwards, who officially takes the reins of the combined company effective immediately as president/CEO. "We will do this by knowing, listening to, and delighting our customers; providing the right products at a compelling value; and delivering a superior shopping experience." Edwards also pledged that the new fused family of Albertsons and Safeway stores will "continue to be active members of our local communities."
Bob Miller, current Albertsons CEO, has also assumed his official new duties as executive chairman of the new company, which will be comprised of three regions and 14 retail divisions, supported by corporate offices in Boise, Pleasanton and Phoenix. Banners will include Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Albertsons, Acme, Jewel-Osco, Lucky, Shaw's, Star Market, Super Saver, United Supermarkets, Market Street and Amigos.
"This is a transformative day for both Albertsons and Safeway," said Miller, who anticipates "a unified, strong organization that is dedicated to bringing a better shopping experience to more customers across the country. Our combined geographic footprint, vast range of brands and products, and service-oriented staff will enable us to meet evolving shopping preferences."
Safeway stockholders will receive $34.92 per share, which includes $32.50 in cash, $2.40 in consideration relating to the sale of Safeway's Property Development Centers, LLC subsidiary, and the remainder relating to a $2 million dividend of Safeway's 49 percent interest in Mexico-based food and general merchandise retailer Casa Ley. Safeway stock will no longer be listed for trading.
Now finalized, the transaction will create a diversified network of 2,230 stores, 27 distribution facilities and 19 manufacturing plants with over 250,000 employees across 34 states and the District of Columbia.
As Progressive Grocer previously reported, the companies agreed to divest 168 stores to four buyers to gain approval from the Federal Trade Commission, which was granted earlier this week.