Business

Safeway to be sold to Albertsons owner Cerberus

Safeway store in San Francisco Image copyright Getty Images
Image caption The deal still needs regulatory approval

US supermarket firm Safeway has agreed to be bought by an investment group led by Cerberus Capital Management, owner of Albertsons and other chains.

The deal is valued at $7.64bn (£4.56bn) in cash, and could eventually top $9bn.

The merger will create an organisation with more than 2,400 stores and 250,000 employees.

It comes amid consolidation in the industry, with Cerberus buying five chains including Albertson's and Jewel-Osco from Supervalu last year.

Albertsons chief executive Bob Miller said that the size of the new outfit would improve its bargaining position with suppliers.

Mr Miller is to become executive chairman of the combined company, and Safeway chief executive Robert Edwards will retain that title at the combined company.

If the proposal receives shareholder and regulatory approval, the merger should be completed in the fourth quarter of 2014.

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