BY DONNA WESTFALL
Another familiar name in the grocery store chain is Albertson’s. Cerberus’ Albertson has just inked a deal with Safeway that is expected to go into effect later this year in the 4th quarter.
In a statement on the Albertsons website, the company said the deal “will create a diversified network that includes over 2,400 stores, 27 distribution facilities and 20 manufacturing plants with over 250,000 dedicated and loyal employees. No store closures are expected as a result of this transaction.” Safeway was second in the marketplace with their Vons and Pavilion stores in Southern California. In first place is Kroger’s.
However, when I checked Scottrade recently, there was rumor and speculation that store closures will take place on any store that they deem unprofitable. Will that, perchance, include our own local store?
Shares have been trading at around $40. Bob Miller, Albertsons current CEO, will become executive chairman. Robert Edwards, Safeway’s president and CEO, will become president and CEO of the combined company. That is if it passes the anti trust regulators, and any lawsuits poised to be filed.
One of the reasons for merging these giants is because consumers are increasingly diversifying their grocery shopping, spreading their purchases among multiple retailers instead of sticking to one stop at a single supermarket. Who in Crescent City doesn’t divide their shopping into trips to Grocery Outlet, Safeway, WalMart, Wild Rivers Health Food Store and Fred Meyers in Brookings, Or. That doesn’t even include those that purchase on-line.
No surprise about the buy-out. As recently as October of last year, Safeway Executive Vice President Diane Dietz sold nearly 300,000 shares over three days for a total value of about $10.4 million. Then, Executive Vice President Larree Renda sold 50,000 shares valued at nearly $1.8 million, and Senior Vice President Jerry Tidwell sold 19,000 valued at about $680,000.
Why would Safeway exec’s sell off their stock? Well, when rumors abound of buy outs, and stock prices go up it’s just a very good time to sell. Besides, if the deal doesn’t go through, Safeway’s stock may plummet.