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.