<p> In what could be perhaps one of the biggest supermarket deals ever seen, Safeway and Albertsons have entered into a definitive merger agreement under AB Acquisition LLC, led by Cerberus Capital Management. The deal is worth <B>$9 billion, or an estimated $40 per share</b>. Robert Edwards, Safeway’s President and CEO, will retain his position at the combined company, while Bob Miller, Albertsons’ CEO, will become Executive Chairman. Looking downstream, what will this merger mean for fresh produce contracts and the retail market? </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> The combined company will span over <B>2,400 stores, 27 distribution facilities, and 20 manufacturing plants with over 250,000 employees</b>, according to a press release. Without a doubt, Safeway and Albertsons’ division of produce buyers will make a huge impact in the industry. Albertsons has been building momentum with its acquisition of United Supermarkets last year. Now with this new merger, it’s clear that the company will be able to reach a more diversified consumer base. Safeway owns 1,335 stores, while Albertsons owns 1,075.<hr class="legacyRuler"><hr class="legacyRuler"><hr class="invisible minimal-padding"><img src="https://cdn.andnowuknow.com/legacyWriterImages/safeway-merger-1-edit.jpg" alt="images030614" /></p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> During the conference call, Edwards stated, “In terms of our vendors – we have a very good relationship with our vendors - and we expect that will continue, especially because we will be a much larger organization, so we look forward to a very good relationship with our vendor partners.”</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> Miller stated, “This transaction offers us the opportunity to better serve customers by adapting more quickly to evolving shopping preferences in diverse regions across the country. Working together will enable us to create cost savings that translate into price reductions for our customers. Together, we will be able to respond to local needs more quickly and deliver outstanding products at the lowest possible price, more efficiently than ever before.”</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> Edwards said, “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.”</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> In the conference call, Edwards added that the merger will deliver an attractive value for shareholders, while improving Safeway’s competitive position. “We will have the resources to better meet the needs of local customers by providing lower prices, a better assortment of products, and an improved shopping experience,” he said.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> Banners 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.<hr class="legacyRuler"><hr class="legacyRuler"><hr class="invisible minimal-padding"><img src="https://cdn.andnowuknow.com/legacyWriterImages/safeway-merger-2-edit.jpg" alt="images030614" /><hr class="legacyRuler"><hr class="legacyRuler"><hr class="invisible minimal-padding"> Safeway shareholders will receive $32.50 per share in cash and will have the right to receive pro-rata distributions of net proceeds from primarily non-core assets with an estimated value of $3.65 per share under the merger agreement. Safeway will also continue plans to distribute the remaining 37.8 million shares of Blackhawk stock it owns to its shareholders in mid-April and prior to the completion of the merger.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> The closing of the merger is expected in the fourth quarter in 2014. Regulatory approvals and stockholder approval is still required, which is expected by the third quarter in 2014. </p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p> While it is yet to be known how far and how significant the ripple of this merger will be, it will be interesting to see the impact it will make in the industry.</p><hr class="legacyRuler"><hr class="invisible minimal-padding"><p><a class="btn btn-sm btn-primary col-lg-12" style="white-space: normal;" href=" http://www.safeway.com/ShopStores/Investors.page" target="_new"> Safeway </a></p><hr class="legacyRuler"><hr class="invisible minimal-padding">
