Albertsons and Safeway, two of the largest grocery store chains in the U.S., will merge, the companies announced March 6. The move will create a network of 2,400 stores, 27 distribution facilities and 20 manufacturing plants with more than 250,000 employees. “Working together will enable us to create cost savings that translate into price reductions for our customers,” said Albertsons CEO Bob Miller in the release. Safeway has primarily focused on its home state of California, where it has 503 stores. Rounding out the top five states for Safeway are Washington, Arizona, Colorado and Texas, with 168, 114, 113 and 108 stores, respectively, according to SNL Financial. In Texas, Safeway operates under the Randalls and Tom Thumb banners, the latter primarily in the Dallas-Fort Worth market.
No stores will close because of the merger, which is expected to be finalized later this year. Albertsons, which is privately owned by Cerberus Capital Management, Kimco Realty Corp., Klaff Realty, Lubert-Adler Partners, and Schottenstein Stores Corp., will acquire all Safeway shares. Safeway shareholders are expected to receive $40 per share. That values the deal at more than $9 billion. Bob Miller will become the executive chairman, while Robert Edwards, Safeway’s current president and CEO, will become president and CEO of the combined company. Kroger, meanwhile, plans to make several investments in the North Texas market. Within the next 24 months, Kroger will build six new stores and expand three locations. Cincinnati-based Kroger also plans to open multiple fuel centers and remodel existing properties in the North Texas area. – Robert Francis contributed to this report.