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WASHINGTON — The Federal Trade Commission on Tuesday cleared the $9.4 billion buyout of Safeway Inc., the nation’s second-largest supermarket chain, by an investment group led by private equity firm Cerberus Capital Management LP.
The Federal Trade Commission on Tuesday cleared the $9.4 billion buyout of Safeway Inc., the nation’s second-largest supermarket chain, by an investment group led by private equity firm Cerberus Capital Management LP.
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Cerberus plans to merge Safeway with its other grocery store assets operating under 16 banners, including Albertsons.
The approval comes after the companies agreed last month to sell 168 stores to four FTC-approved buyers to address the commission’s competition concerns.
The FTC said that without the store sales, the merger would have lessened competition in 130 local markets where the two chains compete. Those markets are in Arizona, California, Montana, Nevada, Oregon, Texas, Washington and Wyoming.
The addition of some 1,300 Safeway stores in 20 states should give Cerberus added scale to take on Kroger Co., the nation’s biggest traditional grocer, and Walmart, which sells the most groceries in the United States. The merger gives the Cerberus-led group control of a company roughly the same size as Kroger’s grocery assets.
The companies said they expect to complete the deal within the next five business days.
Executives with Safeway have said there would be significant cost savings from the merger, and that many of the savings would be plowed back into lower prices that should help the company compete for customers.
Safeway chief executive officer Robert Edwards is slated to retain his CEO title with the combined grocery store business. Bob Miller, Albertsons’ CEO, is to become executive chairman of Cerberus’ grocery operations.
