Safeway sold for $9 billion, merges with Albertsons [View all]

[The Straight Story]

PLEASANTON -- Safeway and Albertsons announced on Thursday that the two supermarket chains will merge to create a massive nationwide grocery network that both companies hope will help them compete in a market they have been steadily losing to big-box retailers, convenience stores and niche grocers.

The merger comes as part of a $9 billion deal with Cerberus Capital Management, the New York private equity firm that owns Albertsons, and by the end of this year, will also own Safeway. Combined, the two supermarket companies will have about 2,400 stores, almost double the size of Safeway today, and just a slightly smaller footprint than rival Kroger's 2,641 stores. The deal marks ones of the largest supermarket buyouts and promises to further transform an industry that has been upended by an onslaught of competition.

Executives said on a call with media on Thursday that the additional stores and expanded products allow them to give consumers the choice they have come to expect in the modern grocery business.

"They way people have shopped for groceries has fundamentally changed," said Albertons Chief Executive Officer Bob Miller, who will become executive chairman of the new supermarket conglomerate. "As our customers need change, we have to adapt (to) a world where they have more options than ever."

http://www.mercurynews.com/business/ci_25289725/safeway-cerberus-reach-preliminary-deal-sell