Safeway Inc., Pleasanton, Calif., and Albertsons, Boise, Idaho, announced a definitive agreement on March 6 under which AB Acquisition LLC will acquire all outstanding shares of Safeway. The merger agreement was unanimously approved by Safeway’s board of directors, and the merger is expected to close in the fourth quarter of 2014, following the satisfaction of customary closing conditions.
AB Acquisition is the owner of Albertson’s LLC and New Albertson’s Inc. and is controlled by a Cerberus Capital Management L.P. (“Cerberus”)-led investor group. It plans to fund the merger, in part, with debt financing of approximately $7.6 billion, equity contributions from its current investors and their affiliates, partners and co-investors of approximately $1.25 billion, and cash on hand of Safeway.