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Albertsons & Safeway to sell 168 stores before merger is approved

By   /   Friday, December 19th, 2014  /   1 Comment

The divestiture of the stores is part of another deal to secure FTC clearance for Albertons to acquire Safeway in a $9.2 billion deal. That transaction, which the companies are calling a merger, was announced in March and is expected to close in January.

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Before the two merge, Albertsons & Safeway announced Dec. 19 that the companies have agreed to sell 168 stores across eight states to four separate buyers. The deals are awaiting approval from the Federal Trade Commission.

The divestiture of the stores is part of another deal to secure FTC clearance for Albertsons to acquire Safeway in a $9.2 billion deal. That transaction, which the companies are calling a merger, was announced in March and is expected to close in January.

“We’re pleased to have found strong buyers for these stores and to have completed this important step toward combining Albertsons and Safeway,” Safeway President and CEO Robert Edwards, who will serve as the combined company’s president and CEO, said in a press release.

If the deals are approved, 14 Albertsons and six Vons stores througout the Tri-Counties will be acquired by Bellingham, Washington-based grocery chain Haggen.

Haggen’s purchase would expand the company’s operations from its current 18 stores with 16 pharmacies to 164 stores with 106 pharmacies. In addition to California, the company would gain territory in Nevada and Arizona. It would also grow the company’s ranks from 2,000 employees to more than 10,000 employees.

Safeway, which operates Safeway, Vons, Pavilions, Randalls, Tom Thumb and Carrs stores, is a Fortune 100 company and one of the largest food and drug retailers in the United States. The company recorded $35.1 billion in sales for 2013.

Albertsons operates ACME, Albertsons, Jewel-Osco, Lucky, Shaws, Star Market and Super Saver and stores under the United Supermarkets family of stores, which includes Amigos and Market Street. The company is privately owned by Cerberus Capital Management, Kimco Realty Corp., Klaff Realty, Lubert-Adler Partners and Schottenstein Stores Corp. The company currently operates 1,081 stores and 14 distribution centers in 29 states with about 115,000 employees.

According to a statement from Albertsons, under the terms of the purchase agreements, the buyers will acquire the stores, equipment and inventory, and intend to hire most, if not all, of the retail employees once the deal closes.

After the close of the transaction in early 2015, Haggen will starting rebranding the Albertsons and Safeway stores it purchased to the Haggen banner in phases. All current retail employees will have the opportunity to join Haggen as stores are transitioned, the company said. Haggen also plans to retain the current store management teams.

In addition to the Haggen deal, Associated Food Stores will purchase eight stores in Montana and Wyoming, Associated Wholesale Grocers and Minyards will purchase 12 stores in Texas, and Supervalu will purchase two stores in Washington.

“With this pivotal acquisition, we will have the opportunity to introduce many more customers to the Haggen experience. Our Pacific Northwest grocery store chain has been committed to local sourcing, investing in the communities we serve, and providing genuine service and homemade quality since it was founded in 1933,” said John Caple, chairman of the Haggen board of directors and partner at Comvest Partners, a private investment firm that owns the majority of shares of Haggen.

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1 Comment

  1. What will happen in the La Crumbre area of Santa Barbara where Vons and Albertons are located a block from each other?

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