Albertsons’ parent company Cerberus to buy Safeway

(AP)

Safeway has agreed to be acquired by an investment group led by Cerberus Capital Management, the owner of several supermarket chains.

The acquisition is worth about $7.64 billion in cash, and pending other transactions could top more than $9 billion.

The deal, announced late Thursday, will bring together Safeway and Albertsons, one of the five chains that Cerberus bought from Supervalu Inc. last year.

It comes amid ongoing consolidation in the supermarket industry, which is facing growing competition from big-box retailers, specialty chains, drug stores and even dollar stores. Kroger Co., a key competitor, recently snapped up regional chain Harris Teeter.

Safeway said in February that it was looking into putting itself up for sale. The Pleasanton, Calif.-based company has been trying to adapt for some time to increased competition and recently shed some of its smaller, less profitable units, such as its Canadian operations and Dominick’s stores in Chicago.

The company has more than 1,300 U.S. locations under banners including Safeway, Vons, Pavilion’s, Randall’s, Tom Thumb and Carrs.

(Copyright 2014 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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