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Putting to rest months of speculation that a similar deal was in the works, Safeway Inc. will sell 16 of its Philadelphia-area Genuardi's stores to Giant Food Stores LLC, a division of Ahold USA, for $106 million.
Safeway will continue to operate the stores until the transaction closes later this year.
"We have made the decision to exit the greater Philadelphia market, including four stores in New Jersey, and focus our resources in those operating areas where we have a stronger presence," said Steve Neibergall, president of Safeway's Eastern Division. "We will be working with the purchasers to ease the transition for our store employees and making efforts to facilitate continued employment for as many of them as possible."
The stores to be sold to Giant include those in Warwick, Newtown Township, Middletown, New Britain Township, Lower Moreland, Abington and Upper Gwynedd. These and other stores — in West Chester, Marlborough, St. Davids, Springfield, Wynnewood, Flourtown, Spring House, King of Prussia and Maple Glen — will become Giant Food Stores after the sale closes later this year.
Safeway also wants to sell eight more stores, including Doylestown and Evesham, N.J., and plans to close its stores in Exton, Royersford and Norristown, the latter of which is the original founding Genuardi family's hometown, where the once esteemed regional supermarket chain began as a family-owned produce merchant in 1920.
Giant is expected to make employment opportunities available to Genuardi’s associates in as many locations as possbile.
“Giant is always looking for convenient locations to better serve our customers,” said Rick Herring, president, Giant Food Stores. “We now have the opportunity to expand our presence in greater Philadelphia and serve new customers.”
The transaction is subject to customary closing conditions, including regulatory approval.
Pleasanton, Calif.-based Safeway operates 1,681 stores in the United States and western Canada and had annual sales of $41.1 billion in 2010.
Carlisle, Pa.-based Giant operates more than 180 stores under the names of Giant Food Stores and Martin’s Food Markets.