Albertsons Parent Cerberus Buys Safeway for More than $9 Billion

March 6, 2014 · 59 comments

safeway

Safeway Inc. and Albertsons today announced a merger agreement for the two grocery chains under which the owner of Albertsons will buy all outstanding Safeway stock in a $9 billion deal.

The combination of Pleasanton-based Safeway’s 1,335 stores in 20 states with the 1,075 outlets of Boise, Idaho-based Albertsons will create a nationwide network of more than 2,400 grocery stores, the two companies said in a statement released today.

The companies said they expect administrative cost savings, but don’t expect to close any stores.

The Safeway shares will be bought by AB Acquisition, which owns the Albertsons chain and is controlled by Cerberus Capital Management LP.

The merger is expected to be completed by the end of 2014. The agreement also provides for a three-week so-called “go-shop” period in which Safeway can receive and consider alternate proposals, the companies said.

Safeway President and Chief Executive Officer Robert Edwards said, “This merger is one of several actions we have taken in recent months as a result of our strategic business review.

“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. We are excited about continuing this momentum as a combined organization,” Edwards said in the press release.

If the merger proceeds as planned, Edwards will become president and CEO of the combined company, while Bob Miller, the current CEO of Albertsons, will become executive chairman.

1 hilo2 March 6, 2014 at 6:36 PM

albertsons sucks!!

2 anon March 6, 2014 at 6:46 PM

I loved the Albertson’s store in Pleasant Hill when I was a kid.

3 KJ March 6, 2014 at 6:47 PM

I’m really sorry to hear this. On my list of places to buy groceries, Albertson’s has always been down at the bottom of the list.

4 Richard March 6, 2014 at 6:50 PM

Prices are going up!

5 Emily March 6, 2014 at 6:58 PM

Cerberus was the three-headed dog at the gates of Hell. This doesn’t sound good.

6 Ted K., SuperMax March 6, 2014 at 7:03 PM

When two companies merge, the fundamental question is “WHY?”

A matter of efficiency and economies of scale?
A matter of two under-performing companies teaming up to survive?
A matter of geographical/regional coverage?

7 Reality Slap March 6, 2014 at 7:05 PM

How does merging companies create competition and reduce prices?

8 KJ March 6, 2014 at 7:13 PM

Cerberus Capital Management, L.P. — I can’t find anything good to say about it. Blood-sucking venture capitalists.

9 Killjoy March 6, 2014 at 7:18 PM

“Safeway Inc. and Albertsons today announced a merger agreement for the two grocery chains under which the owner of Albertsons will buy all outstanding Safeway stock in a $9 billion deal.”

That’s not a merger. That’s a hostile takeover!

10 well March 6, 2014 at 7:22 PM

Our safe way in Martinez could use a serious cleaning. . Pet Co is cleaner. Gross.

11 Dorothy March 6, 2014 at 7:30 PM

@ #6 – Or a matter of raiding corporate assets for more profit?

After the company that bought the one I worked at, it was stripped it of its various corporate assets and then declared bankrupt.

Wonder how many stores will be closed, how many will lose jobs, and how many people who have Safeway as their only real option will have to find a way to shop elsewhere.

12 JustMe March 6, 2014 at 7:44 PM

No good can come from this. Cerberus Capital Management is known to buy, rename, and dump whatever they acquire. They once owned Mervyns, if I’m not mistaken.

13 Cowellian March 6, 2014 at 7:49 PM

I liked Lucky’s until Albertson’s got a hold of them. This can’t be good for employees or customers of Safeway.

14 Jojo Potato March 6, 2014 at 7:55 PM

I wonder how this will effect the new mega Safeway that is planned at the corner of Ygnacio Valley Rd and Oak Grove Rd. Maybe that corner will stay as a weed filled lot for another 20 years. No loss there. Those shops in the Citrus shopping center maybe get a reprieve.

15 Scrappy March 6, 2014 at 7:55 PM

So if Albertson’s bought Safeway, that means that Cerberus also owns Luckys because luckys was bought out by Albertson’s years ago. Can they do this. Doesn’t this sound like some sort of monopoly? What am I missing here?

16 JustMe March 6, 2014 at 8:03 PM

Luckys is a different company. Long ago the old Albertson’s bought Luckys and retired the name. Then Albertson’s was acquired and sold off some stores, and the old Luckys name was brought back for those stores. The Luckys today has no direct ties to Albertsons anymore.

17 Teacher Wannabe March 6, 2014 at 8:04 PM

@Ted K., SuperMax. Or in this case, a struggling store (Albertsons) raising themselves up by merging with a vastly superior store (Safeway).

18 RANDOM TASK March 6, 2014 at 8:23 PM

wow 9 billion ……that’s it …….stupid app got 19 billion …..and yes with no competition look for higher prices and less customer service as well as cheap workers ….and dirty floors ……..Walmart looking pretty good right now …….

19 RanchgirlCA March 6, 2014 at 8:29 PM

Not a good thing. There go all my good finds and store brands, right out the door. I hate this crap.

20 @Killjoy, #9----nothing hostile about it; Cerebus offered March 6, 2014 at 8:48 PM

Safeway accepted.
“The companies said they expect administrative cost savings, but don’t expect to close any stores.” Hope that’s true.

21 vindex March 6, 2014 at 8:49 PM

No a good purchase for consumers. Albertsons is not a good grocery store. Poorly managed and never enough people. It feels dead. Safeway is overpriced, but the culture is much better.

22 Glen March 6, 2014 at 8:52 PM

One of the leaders of Cerberus is Dan Quayle. IMO Cerberus is a private company that works hand-in-hand w/government to accomplish certain things that government alone can’t do. Chrysler was on the ropes after Daimler let them go and Cerberus picked them up. They held Chrysler until a solvent buyer could be found, Fiat. How could a profit be made on the purchase of Chrysler in the shape it was in after Daimler? …and why? Government bail-out?

This purchase of the 2nd largest American grocer by Cerberus is very strange indeed.

23 Mister Wister March 6, 2014 at 8:54 PM

@15,
Albertsons closed down all its Lucky stores. The owners of the Lucky stores that exist in the Bay Area bought the name and are not affiliated with either the original Lucky’s or Albertsons.

24 DREED March 6, 2014 at 9:35 PM

Look on the bright side. At least you will really get to know the one checker helping people during peek shopping times. 14 is a crowd. Time to open another check stand.

25 Dr. Jellyfinger® March 6, 2014 at 9:52 PM

They could have gotten a billion dollars off if they’d used their club card.

26 Reality Slap March 6, 2014 at 10:06 PM

This makes Winco and WalMart look better and better.

27 DanMtz March 6, 2014 at 10:13 PM

Dan Quayle’s a part of Cerberus? Well, that explains it then. He’s always been a potatoe/tomatoe kinda guy. He’ll be the head of produce.

28 Blink March 6, 2014 at 10:45 PM

Good thing there is trader joes

29 CoCoOld March 6, 2014 at 10:58 PM

@Dr. Jellyfinger,
LMAO! And just think of all the gas credits!

30 EAT NON GMO'S!!! March 6, 2014 at 11:04 PM

Hate to say it, but it sounds like the Organic finds at Safeway might get demolished. Educate yourselves people!! DO NOT EAT GENETICALLY MODIFIED FOOD!!!! It is killing us! literally!! Doesn’t matter where you shop but please wake up and stop supporting companies that are poisoning us!
YOU VOTE EVERY TIME YOU BUY FOOD. Do you vote to save a little money now but pay big bucks later with medical bills and horrible illnesses caused from genetically messed-with food?? OR do you vote to buy ONLY ORGANIC and save huge for you and your family’s health in the long run??LUCKYS, SAFEWAY, ALBERTSONS, whatever your name is, please provide more Organic selection.
-Concerned Claycord Resident

31 EATEN BY THE THREE HEADED DOG!!! March 6, 2014 at 11:12 PM

Safeway employees- BE AFRAID BE VERY AFRAID of Cerberus!!! They bought a division of ATT and forced people to leave because they feared losing their medical and retirement pensions. They buy companies suck them dry and get what they can from them and then sell it off! Take a look at their website. A three headed dog is NOT A PRETTY SITE!!!

32 RC March 6, 2014 at 11:20 PM

All of the comments that speak of Cerberus are true! Just look them up online and you will see for yourself. Mervyns? TRUE. Albertsons? TRUE. Chrysler? TRUE.
Three-headed dog that guards the gates of Hell (Greek mythology)? TRUE!

These BLOODSUCKERS bought AT&T Advertising Solutions in 2012. Your phonebooks don’t say “AT&T” anymore…do they? Look. They now say “YP,” which is the name chosen by Cerberus.

Cerberus has wiped out the entire union contract that was in place and the union is about ready to adopt the new one, which I have heard will strip anyone of decent benefits and a decent paycheck for sure! Their contract should have been ratified last August. Over 7 months ago! Management just WALKED OUT on union negotiations after dumping a two-inch thick document on them, which is full of language that they can do what they wish, when they wish to anyone they wish.

I have two good friends that are out on bonafide disabilities and CERBERUS has NOT APPROVED ANY BENEFITS WHATSOEVER. They will lie and wait out every day they can, just to deny your rights! If you have a workers’ comp. or disbility issue, get a competent attorney NOW!

If you work for Safeway and are union represented, take an offer to leave with decent benefits and pensions etc., if you can!! Pray for the rest. Find a new place to work now!

THE ONLY ONES THAT WILL BENEFIT FROM THIS IS THE 3-HEADED DOG AND MAYBE A FEW LOUSY CHEATS IN UPPER MANAGEMENT!

I was blessed enough to be offered early retirement with lifetime medical. Though I was screwed out of my full pension, which oyr union allowed to happen, I was able to walk away with what I had saved and earned in nearly 24 years of loyal service.

Safeway, I am truly sad that it has come to this.

Claycord, do yourselves a favor and the hard workers at Lucky’s (the new version that escaped Cerberus’ Albertsons) and shop there. We have a beautiful Lucky’s that will hopefully benefit from Safeway’s tragic decision.

R.I.P. Safeway!

33 Call it whatever you want..... March 7, 2014 at 1:38 AM

It’s funny, in my lifetime I’ve seen Safeway disappear (70’s) only to reappear (80’s). Albertson’s disappear (80’s) only to reappear (90’s). And Lucky to disappear (90’s) only to reappear (00’s). Recycle names all you want, Raley’s will always be Raley’s!!!

34 Fumunda March 7, 2014 at 5:25 AM

There was a local band called Cerberus in the 80s. They were great.

35 Bottom line March 7, 2014 at 6:33 AM

UNION BUSTING! Lowering labor costs is the first
move to increase their bottom line profit.
Shows strong , then sell off. Remember people,
with the way they toss their Acct. figures around,
these thieves can make money when a comp.
dosent.
Dems.and Reps. are playing towards the same
end, economic slavery.
This is war on a non violent scale, it’s out lined
in the ” Art of War”, written by a Chinese Nobleman
and warlord long ago. These tactics were used
by Chairman Mao , not necessarily for a communist
takeover, but because they are more effective and
less costly than a shooting war. Research this
and you will understand what’s happening on
a global level and how it affects us in America.

36 Victor mature March 7, 2014 at 6:50 AM

Food max purchased luckys from albertsons

37 JET March 7, 2014 at 6:58 AM

wait, so does this mean that all existing Safeway stores will now become ‘Albertsons’? I HATE ALBERTSONS! WTF

38 ale March 7, 2014 at 7:05 AM

Save Mart owns lucky stores in Ca.

39 Cowellian March 7, 2014 at 8:45 AM

It’s not like Cerberus tried to steal Safeway away from its owners. Every report I’ve seen says that Safeway put itself on the market, and tried to find a buyer. Apparently, Cerberus was interested.

If this merger/buyout does go through, the Safeway/Albertson’s will still be the 2nd largest grocer in America. However, Bloomberg is reporting that Kroger has contacted Safeway and Cerberus about joining the deal. Now, that scares the stuffing out of me. That cannot possibly be good for competition or consumers.

40 bumper morgan March 7, 2014 at 8:49 AM

I loathe Safeway. horrible service, horrible meat, high prices, club card trickery. Maybe this buyout will change things. Probably not….

41 Pyrrhus March 7, 2014 at 8:50 AM

I guess we can expect layoffs at the Safeway Corporate offices in Pleasanton and Walnut Creek. I’m so glad I didn’t take a job with them when I had the opportunity.

42 Laura Zah March 7, 2014 at 9:04 AM

Safeway is a much higher quality store than Albertson’s or SaveMart. I expect they will bring the Safeway stores down to their level.

43 Cowellian March 7, 2014 at 9:18 AM

It wouldn’t surprise me if Cerberus operates Safeway and Albertson’s as two separate chains, much like Sears Holding operates KMart and Sears separately.

Names can be very important, Nations Bank bought BofA so they could use the name throughout their banking conglomerate. If Cerberus does decide to stick with only one name, my guess is they’ll choose Safeway, since it has a better reputation than Albertson’s. But if Kroger joins the party, they’ll be the powerhouse of the group.

44 Mimi (original) March 7, 2014 at 9:24 AM

Have never cared for Albertson’s stores – had one nearby when I lived in Sunnyvale and always drove further to go elsewhere. Hated them when they were in the Lucky’s on Alberta – went there ONCE and never again! And now they’re going to ruin Safeway for me – terrific! Hope Safeway finds a better buyer! LOL – what about Piggly-Wiggly from back East? LOL!!

45 Bishop Estates March 7, 2014 at 9:26 AM

I worry about the Employee’s and their families. I have many friends who work at store level and corporate and they are very worried, some of them have 25+ years with the store, what will happen to them?

46 Dissapointed March 7, 2014 at 9:38 AM

Really, no store closings? Why then just 2 weeks ago our local Albertson’s was closed. Neighboring town Albertson’s also closed.

47 Mr. Pink March 7, 2014 at 10:11 AM

I’ll admit it. I have no idea what any of this will mean in the long run.

48 @Ale March 7, 2014 at 10:12 AM

Save Mart also made a deal with Safeway not to
long ago regarding marketing territories, store
locations. That leads me to believe Safeway was
setting the stage for a few years in preparation
for a move like this.
It will be interesting to see how this all shakes out.

49 just a concordian March 7, 2014 at 10:21 AM

I hope the parent company won’t take away the gift card points and the gas points. Safeway is a fantastic way to stock up on gift cards to places you can actually go to and drive there cheaply. Especially when those 4x point promos show up. I plan my non grocery store purchases around gift cards. And not just them. my tmobile bill is paid via refill cards bought with best buy gift cards. Restaurant outings, hell, even Amazon! I always pay less than 2.80 for a gallon.

50 Chuckie's Wife March 7, 2014 at 10:23 AM

We started shopping at Sprouts and Trader Joes more in anticipation of this “merger” (I think it’s an acquisition) to go through and things seriously changing. There’s one glimmer of hope – the CEO of Safeway will be the CEO of the combined company. Let’s hope this spells that existing Albertson’s stores will become more like Safeway and not the other way around!

51 Silva March 7, 2014 at 10:52 AM

I strongly support #30’s message.

Safeway sold to the highest bidder. A few people are nest feathering right now, but WE’RE screwed. Not that I would ever have shopped there. Too much inside information.

52 Captain Bebops March 7, 2014 at 11:47 AM

You’re seeing fascism in actions. Acquisitions and mergers are the terrible game the corporations play so they can be kings of the world. Soon there will be only 4 corporations, one for each industry and we will all be serfs to them. Rise up and revolt!

53 Doug C March 7, 2014 at 11:54 AM

I don’t understand why anyone shops at Safeway when Lunardi’s is reasonably close by.

54 tired of taxes March 7, 2014 at 2:02 PM

@52
Kinda reminds me of “Taco Bell” as the only restaurant available in the setting of the movie “Demolition Man” when Sly’s character wakes up in the distant future.

55 Kirkwood March 7, 2014 at 2:08 PM

Remember “Soylent Green”, the movie depicting life in the 21st century? In that movie, one company controlled 80% of the world’s food supply.

56 CatWoman March 7, 2014 at 2:29 PM

I myself go to Trader Joes or Whole Foods-so I could really care less.

57 Elwood March 7, 2014 at 5:10 PM

Everything is revolting!

Revolt now before it’s too late and everything becomes a subsidiary of the RAMJAC Corporation!

58 Kirk March 8, 2014 at 10:12 AM

FYI they also bought Remington Arms, and Marlin. Backed by a lot of Croatian arms manufacturing money, the people who make the xd series for Springfield Arms.

People who worry about a federal takeover should really be worried about a corporate take over. Not for us but your grand kids. Feds are going to go the same way as royal families.

It’s inevitable as governments are popularity contests, where as corporations are more ability based, unless you are GM of course. It is evolution at its finest.

59 Blake March 8, 2014 at 7:33 PM

This is a sad day. Time to look at other options.

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