- Jasperdo / Foter / CC BY-NC-ND
A group led by Equity firm Cerberus is buying grocery giant Safeway in a $9 billion dollar deal that will merge its holdings in Acme Markets’ owner Albertsons.
Albertsons is controlled by a Cerberus Capital Management, L.P. investor group, which also includes Kimco Realty Corporation Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.
Albertstons and the Cerberus group acquired Acme and other chains from former Acme owner Supervalu last year. The deal would give Albertsons four more stores in Delaware. Both chains have faced heavy competition from Shoprite to the north and Wal-Mart to the south.
The new owner has worked to improve the performance of Acme and worked to highlight the Philadelphia roots of the company.
Safeway stumbled with its acquisition of suburban Philadelphia chain Geunuardi’s several years ago. The grocer’s name has virtually disappeared as stores were sold or closed. Two Genuardi’s stores in northern Delaware were re-branded as Safeways.
Stores in Dover and Rehoboth have always operated as Safeways.
Safeway has been in a consolidation mode in recent years. Its strongholds are on the West Coast and Washington, D.C.
“This merger is one of several actions we have taken in recent months as a result of our strategic business review. The combined value of the transactions described above is expected to deliver a premium to Safeway’s shareholders of 72% from one year ago, and 56% over the share price six months ago,” said Robert Edwards, CEO of Safeway Inc. “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. We look forward to working with Bob Miller and the rest of the Albertsons team as we proceed together on a path towards becoming an even stronger organization.”
Cerberus may be best be known in Delaware for its buyout of Chrysler Corp. and a decision to close the Newark Assembly Plant. A deep downturn in the economy and the bankruptcy of Chrysler, now owned by Fiat, sealed the fate of the facility. The site is now owned by the University of Delaware.
Another loss of competition to us, the consumers. I realize size counts, but smaller local owned (at least regional) businesses are desirable to shoppers. We spend time in Florida, and if the grocery stores up North would emulate Publix it would go a long way in building customer loyalty. Wynn Dixie is likewise a consumer friendly store. It is in how their employees are trained, and just have great dispositions. They are friendly and extremely helpful.