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Albertsons and Safeway Complete Merger Transaction

Christine

/

Jan 30th, 2015

Corporate Newsroom

Newly combined private company will operate 2,230 grocery stores in 34 states and the District of Columbia

BOISE, Idaho and PLEASANTON, Calif., Jan. 30, 2015 /PRNewswire/ — AB Acquisition LLC and Safeway Inc. (NYSE: SWY, “Safeway”) announced today that they have completed their proposed merger. Under the terms of the merger agreement first announced and unanimously approved by Safeway’s Board of Directors in March 2014, AB Acquisition LLC, the owner of Albertson’s LLC and New Albertson’s, Inc. (collectively “Albertsons”), will acquire all outstanding shares of Safeway. AB Acquisition is controlled by an investor group led by Cerberus Capital Management, L.P. (“Cerberus”), which also includes Kimco Realty Corporation (NYSE: KIM), Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.

Safeway shareholders will receive $34.92 per share in cash, consisting of (i) $32.50 in initial cash consideration, (ii) $2.412 in consideration relating to the previously announced sale of the assets of Safeway’s real-estate development subsidiary Property Development Centers, LLC (“PDC”) and (iii) $0.008 in consideration relating to a dividend of approximately $2 million (after deduction for taxes at an assumed rate) that Safeway received in December 2014 on its 49% interest in Mexico-based food and general merchandise retailer Casa Ley, S.A. de C.V. (“Casa Ley”). In addition, shareholders will receive contingent value rights entitling them to pro rata proceeds relating to deferred consideration from the sale of PDC and any proceeds from the sale of Safeway’s 49% interest in Casa Ley.

Both contingent value rights will be non-transferable and non-tradable. For tax reporting purposes, Safeway intends to report that the fair market values of the contingent value rights at the time of the merger for PDC and Casa Ley are $0.0488 and $1.0149, respectively, per share, based on third party valuations.

With respect to PDC, both the initial cash distribution ($2.412 per share) and the total estimated asset value including the CVR ($2.461 per share) have increased slightly over the estimated values set forth in Safeway’s December 23, 2014 press release announcing the sale of PDC. Those earlier estimates were $2.38 per share and $2.45 per share, respectively.

In addition, in April 2014, Safeway stockholders received a distribution of stock in Safeway’s former Blackhawk Network Holdings, Inc. (NASDAQ: HAWKB) subsidiary valued at approximately $4.02 per Safeway share at the time of the distribution.

As a result of the completion of the merger transaction, the common stock of Safeway will no longer be listed for trading on the New York Stock Exchange or any other securities exchange. Safeway will file a Certification on Form 15 with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to suspend Safeway’s reporting obligations under Sections 13(a) and 15(d) of the Exchange Act.

Merger Closing Paves Way for Enhanced Shopping Experience

“We plan to be the Favorite Local SupermarketTM in every community we serve,” said Safeway President and Chief Executive Officer Robert Edwards, who becomes President and CEO of the newly combined company, effective immediately. “We will do this by knowing, listening to, and delighting our customers; providing the right products at a compelling value; and delivering a superior shopping experience. We will also continue to be active members of our local communities.”

As previously announced, current Albertsons Chief Executive Officer Bob Miller will become Executive Chairman.

“This is a transformative day for both Albertsons and Safeway. This merger creates a unified, strong organization that is dedicated to bringing a better shopping experience to more customers across the country,” commented Miller. “Our combined geographic footprint, vast range of brands and products, and service-oriented staff will enable us to meet evolving shopping preferences.”

The merger will create a diversified network that includes 2,230 stores, 27 distribution facilities and 19 manufacturing plants with over 250,000 employees across 34 states and the District of Columbia.

The new company will be comprised of three regions and 14 retail divisions, supported by corporate offices in Boise, ID, Pleasanton, CA, and Phoenix, AZ. Banners will include Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Albertsons, ACME, Jewel-Osco, Lucky, Shaw’s, Star Market, Super Saver, United Supermarkets, Market Street and Amigos. In December, the companies announced the sale of 168 stores to four separate buyers, as divestitures required in order to secure U.S. Federal Trade Commission approval of the transaction.

Advisors
Goldman, Sachs & Co. served as financial advisor to Safeway in connection with the Company’s strategic review and the transactions. Greenhill & Co. has also served as financial advisor to Safeway. Latham & Watkins LLP served as Safeway’s outside legal counsel, and The Law Offices of Richard C. Weisberg served as outside legal counsel on antitrust matters. Citigroup, lead financial advisor, Bank of America Merrill Lynch and Credit Suisse served as financial advisors to Albertsons, Cerberus and the investor group. Schulte Roth & Zabel LLP served as lead outside legal counsel to Albertsons, Cerberus and the investor group, and Dechert LLP, Schulte Roth & Zabel LLP and Baker Botts LLP served as outside legal counsel on antitrust matters.

About Safeway Inc.
Safeway Inc., 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 with sales of $35.1 billion in 2013. The company’s common stock previously traded on the New York Stock Exchange (NYSE) under the symbol SWY, and will be delisted from the NYSE as a result of the closing of the merger. For more information, please visit www.Safeway.com.

About Albertsons
Established in 2006, AB Acquisition LLC (“Albertsons”), which operates ACME, Albertsons, Jewel-Osco, Lucky, Shaws, Star Market and Super Saver, and stores under the United Family of stores, Amigos, Market Street and United Supermarkets, is working to become the favorite food and drug retailer in every market it serves. The company is privately owned by Cerberus Capital Management, Kimco Realty Corporation, Klaff Realty, Lubert-Adler Partners, and Schottenstein Stores Corporation. For more information, please visit www.Albertsons.com.

Media Contact:
Brian Dowling
brian.dowling@safeway.com | 925-467-3787
Investor Contacts:
Christiane Pelz
christiane.pelz@safeway.com | 925-467-3832
Melissa Plaisance
melissa.plaisance@safeway.com | 925-467-3136
http://investor.safeway.com

 

Logo – http://photos.prnewswire.com/prnh/20140919/147280

Logo – http://photos.prnewswire.com/prnh/20140919/147279

 

SOURCE Safeway Inc.

64 Responses to Albertsons and Safeway Complete Merger Transaction

  1. John Bergin 25/05/2015 at 1:18 pm

    Is Albertsons going to continue Safeway’s
    Home Delivery service? I am a retiree and can’t afford Safeway Delivery prices. They charge up to !00-% additional for an item AND THEN have the audacity to charge delivery fees on top of this. So much for taking care of our seniors…….. Please respond. John Bergin

    • Customer Care 25/05/2015 at 2:16 pm

      Thank you for your inquiry, John. Both Albertson’s and Safeway stores will continue to operate and offer the same services as they did before the merger. Currently, Albertson’s has no plans to offer a home delivery service. ~Thomas

  2. Tejal 28/05/2015 at 3:41 am

    Under what name can I find Albertsons Total Company TA & Safeway Corp TA in the Nielsen database?

  3. Michael 31/05/2015 at 5:20 pm

    Since this merger, Von’s sold their locations in the Tustin/Irvine, CA area. Only Albertson’s is available. Von’s was our family’s favorite place for the offering of Just for U e-coupons and member discounts. But importantly, they offered gas rewards on your purchases. These features are taken away from the customers in this area and the nearest Von’s location is over 5 miles away. Not a local convenience as it used to be. Will Albertson’s offer these rewards for loyal customers, especially the gas rewards as this area is very nationally known to be a family oriented area and this reward was highly popular. Please repond.

    Loyal Von’s customer

    • Customer Care 31/05/2015 at 5:43 pm

      Hi Michael, thank you for your inquiry regarding a fuel rewards program at our stores. We currently do not have any plans of offering a fuel rewards program for our customers in your area. We put great value on your feedback and I will make sure to have your request reviewed to possibly offer a discount program in the future. ~Thomas

  4. Robert H Dixon 01/06/2015 at 1:30 pm

    There are a Albertson and a Tom Thumb stores within walking distant of each questions: will they carry the same product and sell discounts, will there be heavy compotion and the store keep there indemnity?(names)
    Who hold the majority stake in the merger?Thanks, RHD

  5. Glendene 09/06/2015 at 11:49 am

    Is there a chance we will have a market street in Arlington txt or Mansfield tx there are no market street stores near us and would be a great addition to us in this area tnx

    • Customer Care 09/06/2015 at 7:21 pm

      What a wonderful suggestion, Glendene. We will keep your suggestion in mind for future locations. Thank you for being a Market Street fan! ~Faith

  6. Steve Douglas 19/06/2015 at 5:46 pm

    I have been shopping at Safeway store # 1985 at 9705 N. Thornydale Road in Marana Arizona for nearly 20 years. When the merger was announced they said that this location would remain open. When the merger occurred in December we noticed that a lot of items were not being stocked. When we asked the staff we were told it was just because of the transition and it would be better son. Now six months later its worse than ever. The wonderful staff at the store say they are ordering items but their orders go unfilled. It seems as if, by failing to support the store, there is a concerted effort to kill it. We hate to leave, but if it’s not corrected we will be taking our business to your competitors.

  7. j stone 26/06/2015 at 9:27 am

    I do not like that Albertsons sold their closest store to me. It has been replaced by a much more expensive and organic type store Haggen. I dislike Albertsons change, they sold themselves to a big company and are going to be the next wal-mart, which is a disgusting store to shop at. Monopoly is not good. Where is ther personality and individuality. In California, Westfield has monopolized the Malls and it feels like every one of them are the exact same. I have always held the competition between Albertsons and Vons, but now neither one of them are worth anything. We have another pets mart petco merger.

    • Christine Christine 26/06/2015 at 9:54 am

      Hi, I’m sorry to hear that your local stores aren’t meeting your needs. I would love to know which Von’s and Albertsons stores are in your area so we could take a closer look at the issues you’ve mentioned. Could you please email me your contact information so I can put someone from our local team in touch with you? My email address is christine.wilcox@albertsons.com.

      Thanks,
      Chris

  8. Lynnette 26/06/2015 at 8:52 pm

    Hello,
    I posted on another thread, but had additional questions. This thread looked more current, so I thought I would post them here.
    I understand (from a previous answer) that an employee who has left a Haggen Store that was divested would have to wait a year before they could reapply for employment at an Albertsons (per the merger agreement).
    Can you tell me if this is also the case for applying for employment at Safeway? Also, can you provide me with information on where I can find documentation regarding this rule? I have been unable to locate anything that speaks to this situation, and it seems to be something that many people are unaware of. Thank you.

  9. Rebecca 11/08/2015 at 10:23 pm

    Hello,
    In my area Safeway has had a charity program …escrip. It helps our local high school. Will this or another program be available after the merger?

    • Christine Christine 17/08/2015 at 8:40 am

      Moving forward, Safeway announced it will phase out of eScrip, and our stores & divisions will have the authority to manage their own donation programs to schools as well as a range of other charitable causes in their communities. Former eScrip participating schools will be eligible to apply for grants from The Safeway Foundation through their local store’s website starting in July 2016. Grants will be considered by each local division operating area through an online application that you can reach on the stores’ website or through http://safewayfoundation.org/.

  10. Joanne Castles 16/08/2015 at 11:45 am

    Hi. I understand that Safeway will no longer be involved in the eScrip program. Will there be another type of scrip program available other than the gas rewards. Specifically, I’m interested in whether Safeway will offer a program to support non-profits (other than schools). I am involved in a local non-profit that runs the county animal shelter. We also offer financial help to the community for veterinary care if they cannot afford it. Thank you – Joanne

    • Christine Christine 17/08/2015 at 8:41 am

      Hi Joanne, Moving forward, our stores & divisions will manage their own donation programs to schools as well as a range of other charitable causes in their communities. Grants will be considered by each local division operating area through an online application that you can reach on the stores’ website or through http://safewayfoundation.org/. Thanks, Chris

  11. Richard 17/08/2015 at 8:26 am

    When will Albertsons/Safeway be posting the IRS Form 8937 (which was required within 45 days of the merger transaction) to its websites?

    • Christine Christine 17/08/2015 at 8:34 am

      Hi Richard, because we are privately held, we currently don’t post financial information to our site. Thanks.

  12. Lei Lei Yang 24/08/2015 at 4:07 pm

    I lice near the downtown San Jose and Market Safeway is my daily shopping location. I like Sushi bar from that location and AFC franchise provide Sushi.
    What will happen after Albertsons Safeway Merger? Will Albertsons bring in other Sushi franchise instead of AFC?

    • Christine Christine 24/08/2015 at 5:14 pm

      Hello – We’re glad you love the store and visit it so often. As for the merger, it has been closed since January, so any changes going forward in the store would simply be part of normal operations. I’ll share your feedback with the team there.

      Thanks!
      Chris

  13. Matt 05/10/2015 at 1:53 pm

    Hello , I’m confuse here. Is Albertson a primary name? Are you already brought Untied Supermarkets in Texas? Are you own the Safeway Corp and Untied Supermarket Corp 100% ? The looks change, employee and employer dress color change ?

    • Christine Christine 06/10/2015 at 10:00 am

      Hi Matt, thank you for your questions. Albertsons and Safeway completed a merger in January 2015, and our company also acquired United Supermarkets in late 2013. We have many banners under which our company operates stores, and a decentralized operating structure which allows our divisions to make the best decisions for their marketplace, including what uniforms the employees will wear at the stores. I hope that helps answer your questions.

      Thanks, and have a great day!
      Chris

  14. Wendi 17/10/2015 at 9:34 pm

    I am so disappointed with the merger of Safeway and Albertsons. There was an Albertsons right outside my Scottsdale community gate, never shopped there, always went to Safeway 4 miles away. The Albertsons closed, Haggen went in and now they will close. The Safeway is practically empty, every week more shelves disappear, there is less of everything and prices have shot up and the quality of produce has gone down. The new grocery carts don’t hold as much and the bottom rack is almost useless. The horrible music of screaming women interrupted by “attention K-Mart shoppers” type ads literally forced me out of the store without half of what I went there for, I usually spend nearly $200, but didn’t even get to $100 today the experience was so miserable. I just could not leave fast enough. I guess I will have to try Frye’s or Basha’s again, two places I never liked as well as the old Safeway. I am so bummed that my favorite store is turning into an Albertsons.

  15. Carlos 02/11/2015 at 4:50 pm

    If you work at Safeway does your discount work for both Safeway and Albertson?

    • Customer Support 03/11/2015 at 2:53 pm

      Carlos, thank you for your inquiry. Employees will receive a separate Albertsons discount card to be used for the employee discount! -Savannah

  16. Bea Claiborne 03/11/2015 at 12:33 pm

    I have fallen in love with Lucerne’s brand Salted Caramel coffee creamer. I have searched many Safeway stores in Northern Va., Wash., D.C. and Maryland. Do you have any insights as to if and when this favor will be back in production? Thank you, Bea

    • Customer Support 03/11/2015 at 2:57 pm

      Bea, thank you for your inquiry. Which store do you shop at? We would be happy to submit a product request for this item. -Savannah

  17. Bea Claiborne 10/11/2015 at 5:34 am

    Good Morning, Savannah

    Thank you for your prompt response. The store location is 4240 Merchant Plaza, Woodbridge, VA 22192. OMG! I hope you can help me! Warm Regards, Bea

    • Customer Support 10/11/2015 at 10:28 am

      Thank you for the additional information, Bea. Unfortunately, this item has been discontinued. We will be sure to submit a product request for this item, to let our Product Buyers know you would like to see it back! -Savannah

  18. SavvyCat 10/11/2015 at 9:28 pm

    Albertson’s it always at the bottom of my list for places to shop because I can’t use e-coupons and I don’t intend to waste paper and ink to print them. That defeats the purpose of savings. Any chance Albertson’s with take up the brilliant Just For U program from Tom Thumb? I loved their app, the programs, everything was great, but I moved to Utah from Texas and the pickins’ are slim. It’s like you’re stuck in the pre-technology age.

  19. George 06/12/2015 at 2:56 pm

    How would I contact the respective real estate divisions about a possible expansion site.

    • Customer Support 07/12/2015 at 12:51 pm

      George, the Investor Contacts listed at the end of the post will be able to assist you further. -Julio

  20. Gelia 10/12/2015 at 3:55 pm

    Would you please respond to my question on 12/7? Thank you.

    • Customer Support 13/12/2015 at 12:00 pm

      Hi, Gelia. We were unable to locate your inquiry from 12/7. Could you please provide more details? -Julio

  21. John Trumpower 04/01/2016 at 1:05 pm

    Will Albertsons be opening a store in the Ocean City, Maryland area in the near future? If so, under which banner? Thanks…

    • Customer Support 06/01/2016 at 11:49 am

      Thanks for the interest, John. We will be sure to let our Real Estate Department know you’d like to see us in your area soon. Have a great day! -Julio

  22. Linda 15/01/2016 at 5:36 pm

    When I lived in California I used a Von’s card that was linked to my checking account so I wouldn’t need to write a check. I have now moved to Arizona and use my Von’s card at Safeway. Will I be able to use my Von’s card at Albertsons too?

    • Customer Support 15/01/2016 at 8:41 pm

      Linda, thank you for your inquiry. Albertsons does not use Club Cards, therefore, the card would not be accepted. -Savannah

  23. Sherrey 07/02/2016 at 1:17 pm

    Please continue the Just For U and gas rewards.

  24. kim 26/02/2016 at 8:42 pm

    since your company took over my local Safeway it is terrible, I think I need a new place to shop your selection of goods is terrible. When I took care of my father who lived in Phx. I shopped @ Albertson it met all our needs. Fry’s is looking very good. You should have planed your take over a little better.

    • Customer Support 27/02/2016 at 3:41 pm

      Kim, can you please provide the address of your local store? We’re sorry for your dissatisfaction, and would like to address your comments with the Store Director. Please also let us know if there are specific items you are looking for, so we can request them for you. Thanks! -Rebecca

  25. Carl 29/02/2016 at 12:01 pm

    Congratulations at making two different stores look the same inside. That is a complaint, not a compliment. My family has always used the Safeway store brands as an alternative to brand names. We like the Primo Tanglio deli meats, not the cheap stuff with fillers. Maybe you will step it up and carry Boars Head or something similar.

    Really disappointed in the decision to make a safeway store carry albertsons stuff. We don’t shop Albertsons because the store is considered a low end market with really high prices compared to Safeway and other stores. We’ve been forced to shop at Fred Meyer or QFC for quality products. I will never forget the butcher at a Albertsons in Renton/fairwood who said he would never eat the beef he sold as it was old cow and shoe leather. I agreed.

    Please return the Safeway store brand products to the shelves and leave Albertsons to Albertsons.

    • Customer Support 29/02/2016 at 2:40 pm

      Carl, we’re sorry to hear of your dissatisfaction with some of the changes that have occurred at our stores. While we can understand how this might be viewed as inconvenient, there are many positive changes that merging two great companies together will bring. The focus is always to improve the customer experience for our customers and this includes providing more locations to shop at, more variety in the products we carry and we want to bring all this to you at the lowest possible prices. We value your feedback and thank you for your comments about the Albertsons/Safeway Merger. -Rebecca

  26. Kym 09/03/2016 at 1:11 pm

    Why is it so difficult to find a listing of the produce buyers name and # or email? Before the merger we were an approved supplier and now everything is all changed. Emails, phone numbers, etc. and no direction on who to contact. Any help or direction would be appreciated. Thanks,

  27. Debra 15/03/2016 at 8:44 pm

    Since Albertsons and Safeway merged, our Safeway plain SUCKS! Management is unapproachable, the new checkers moved into our store is running out our familiar checkers. The store no longer feels like “family” but rather cold and unfriendly. The produce quality has gone down the drain and the prices have shot through the ceiling. The shelves are often bare, especially “sale” items. I should not have to make several trips to fill a “rain check” well known and loved store labeled products are no longer available. The “buy 1 get 2 free meat “deals”” are no deal as the per pound price has doubled. The the meat being offered is of poor quality. Checkers that we have known for years are leaving due to the lousy treatment they receive and the loss of hours. This merger shows me and many nothing more than corporate greed. As long as you continue to get your very high profit margin, the heck with your customers and your employees. Shameful. I no longer shop ( after more than 40 years) Safeway which is less than a mile from my home. I now travel to Fred Meyers which is 4 miles away. If I have to deal with strangers, I may as well deal in a store where the prices are better and the quality of the fresh foods are better.

    • Christine Christine 15/03/2016 at 8:47 pm

      Dear Debra, I’m sorry that’s been your experience. I’d like to be able to forward this to the division where it’s occurring so a member of their customer service team can get back to you. Can you tell me what city you shop in?

      Thank you for your feedback.

  28. Saul Alvarez 30/03/2016 at 1:59 pm

    What is the difference between Albertsons and Albertsons Market?

    • Christine Christine 30/03/2016 at 4:51 pm

      Hi Saul, for the most part, Albertsons Market stores are operated by our United Supermarket division in West Texas. There are a few stores around the company that are also bannered Albertsons Market, but they’re all part of the family. Thanks! Chris

  29. john machado 28/04/2016 at 5:23 pm

    There are two Safeway products near and dear to my heart. Watch’n carbs fudge bars which is no longer sold at my Safeway store and Safeway care men’s guards, which is so far still on the shelves. please bring back my fudge bars and please do not stop selling my men’s guards.

    • Customer Support 28/04/2016 at 6:18 pm

      John, thank you for your feedback. Please let us know which location you shop at the most frequently so that we can research this for you. -Samantha

  30. John machado 06/05/2016 at 7:45 pm

    My store is Safeway
    17049 West Bell Rd.
    Surprise, AZ 85374
    Phone: 623-518-1059

  31. Eric 11/05/2016 at 4:42 pm

    My comment is that I love the Safeway delivery service. I am physically disabled (and low-income) living in downtown Seattle, WA. Grocery stores are not nearby (meaning I would have to take a bus) and I couldn’t carry very much in my wheelchair anyway. The delivery service is essentially a life-saver for me and, unlike someone else posted, the fees are quite affordable and the prices are NOT “up to 100% additional” (!?!) I find great deals every time I e-shop.
    Please continue this service! And a big “Thank You” to the courteous and helpful delivery people!

    • Christine Christine 11/05/2016 at 4:44 pm

      Eric, thank you so much for the positive feedback! We’ll make sure to share it with the folks in our Seattle division. Have a great day!

  32. Reed 22/05/2016 at 7:53 pm

    Will Safeway keep it’s name in California ?

    • Christine Christine 18/06/2016 at 9:26 am

      Hi Reed – we have no current plans to replace the Safeway name in California. Safeway is a strong brand that customers love, and we’re committed to it. Thanks!

  33. Gene 27/05/2016 at 12:35 pm

    Can you explain why the Albertson’s in Largo Mall, Largo, FL is now branded as Safeway?
    I thought Albertson’s bought Safeway.
    Thanks.

    • Christine Christine 18/06/2016 at 9:24 am

      Hi Gene – Because we have several banners in our company (19, in fact), sometimes we’ll change the banner that a store operates under. We’re proud that we have a variety of banners, and each of them are unique. In the case of Florida, we’re bringing a fresh take to the three locations that we’ll continue to operate there. They’re grand opening today (6/18). If you have an opportunity to go by the store, please let us know if you think the switch was a good one!

  34. Jeremy 18/06/2016 at 9:00 am

    Your merger ruined our Eldersburg Safeway. A lot of the very kind employees who worked there were replaced. The new manager there is nasty. After being a customer for nearly a decade, I stopped shopping there. I was treated very rudely.

    • Christine Christine 18/06/2016 at 9:18 am

      Hi Jeremy – I’m so sorry that you feel that the service in the Eldersburg Safeway has declined. I’m also sincerely sorry that you feel you were treated rudely and we lost your business over it. We pride ourselves in helping our teams to provide great service, so I’m going to forward your note to the Eastern division team who manages that store to address your concerns. I do hope that at some point you’ll consider shopping with us again.

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