May 14, 2015, 9:47 PM
- Consolidation in the grocery industry could pick up even more, observes Supermarket News.
- A large merger between Albertsons and Safeway (NYSE:SWY) has been followed by talks between Delhaize (NYSE:DEG) and Ahold (OTCQX:AHONY).
- The increased push by Wal-Mart and Target in the sector has added pressure to leverage store growth through M&A.
- "There is mounting pressure in the supermarket industry to consolidate operations to drive better purchasing power and leverage distribution and technology platforms," notes Wolfe Research.
- Kroger (NYSE:KR) is seen as a likely candidate to look for a chain to acquire.
- Previously: Ahold, Delhaize confirm merger talks (May 12)
- Grocery stocks: RNDY, SVU, VLGEA, WFM, CASY, IMKTA, OTCPK:PUSH, TFM, SFM, WMK.
Jan. 30, 2015, 9:09 AM
- Safeway (NYSE:SWY) and Albertsons complete their merger after working out a deal with the FTC to divest stores.
- The combination of the two chains created a network of 2,230 stores and 27 distribution facilities in the U.S.
- Safeway shareholders will receive $34.92 in cash consisting of funds from the acquisition by Cerberus, real estate asset sales, and dividends.
- Shares of SWY will no longer trade on the NYSE.
- Previously: Safeway and Albertsons work out deal with FTC (Jan. 27 2015)
Dec. 20, 2014, 9:05 AM
- Safeway (NYSE:SWY) and Albertsons have agreed to sell 168 stores across eight states, mostly in the western U.S., in a bid to gain merger approval from U.S. antitrust regulators.
- The companies, which together own ~2,400 stores, say they expect the buyers to hire most, if not all existing store workers.
- The biggest beneficiary of the deal appears to be the Haggen chain, which is purchasing 146 stores and adding ~$750M in sales.
Mar. 7, 2014, 9:20 AM
Mar. 6, 2014, 5:10 PM
- As rumored, Supermarket chain owner Albertsons, controlled by an investor group led by P-E firm Cerberus, is acquiring Safeway (SWY). Investors are unhappy with the specific deal terms. (PR)
- Albertson's will pay $32.50/share in cash, distribute proceeds from the sale of Safeway's real estate subsidiary assets and Casa Ley stake (estimated value of $3.65/share), and distribute Safeway's 37.8M Blackhawk Network (HAWK) shares (current value of $3.95/share).
- The deal is expected to close in Q4, has a $400M termination fee, and comes with a 21-day go-shop period. Albertsons plans to fund the deal with the help of $7.6B in debt financing.
Feb. 23, 2014, 2:51 AM
- Private-equity firm Cerberus is the leading bidder for Safeway (SWY), Bloomberg reports, adding to a Reuters article that the two are close to a deal.
- The companies are still negotiating over price; Safeway's market cap is $9.09B.
- The grocery chain said last week that it's in discussions to sell itself.
- Other P-E firms are interested in buying Safeway in parts, although the company prefers to be sold in its entirety.
- Cerberus is willing to bid higher than other potential suitors, because it believes it can generate cost savings via a tie-up between Safeway and Albertsons, which the P-E company already owns.
Feb. 21, 2014, 12:52 PM
- Cerberus is closing in on a purchase of Safeway (SWY +3.9%) after months of talks, according to Reuters.
- A leveraged buyout deal could be announced within weeks.
- The P-E firm owns the Albertsons chain and could generate some significant synergies through shared costs of the two grocery store operators if antitrust issues can be resolved.
Feb. 19, 2014, 4:18 PM
- In tandem with its Q4 results, Safeway (SWY) announces it's "in discussions concerning a possible transaction involving the sale of the company."
- The company also says it's exploring options for monetizing its 49% stake in Mexican grocery store chain Casa Ley, and has decided to distribute its 37.8M-share, 72.2% stake in Blackhawk Network (HAWK) to shareholders. Blackhawk shares are down 1.2% AH.
- Q4 results, PR
- Previous: Safeway reportedly open to talks with P-E firms
Dec. 2, 2013, 4:40 PM
- Safeway (SWY) sells 11 Dominick's stores in the Chicago metro area in a cash and lease assumption deal to Roundy's (RNDY) for $36M. Close is expected this month.
- Safeway had announced earlier in the year its decision to exit the Chicago market. The supermarket operator continues to actively shop its remaining stores.
- Update: In conjunction, Randy has suspended its 5.7% dividend to invest the capital into the Mariano's brand. (8-K)
- RNDY +5.7% AH
- Safeway PR, Roundy's PR
Oct. 22, 2013, 11:05 PM
- Reuters reports Cerberus and other P-E firms are "exploring a deal for all or part" of Safeway (SWY). The supermarket chain is said to be reviewing its options with Goldman's help.
- The report comes a month after activist investor Jana Partners disclosed a 6.2% stake in Safeway. Since then, Safeway has announced plans to abandon its money-losing Chicago ops, and has launched a new $2B buyback program. The company is in the midst of selling its Canadian ops to Empire Co. for $5.7B; Canadian regulators just signed off on the deal.
- Shares finished AH trading up 4.1%.
Oct. 10, 2013, 4:59 PM
- In tandem with its Q3 results, Safeway (SWY) announces it's leaving the Chicago market by early 2014, and unloading the 72 Domenick's supermarkets it owns in the area. The move will yield a $400M-$450M cash tax benefit, but will also trigger "a multi-employer pension withdrawal liability" that will cost $375M over 20 years.
- Domenick's lost $35.2M ($0.09/share) over the first 9 months of 2013. Excluding Domenick's, Safeway now expects 2013 EPS from continuing ops. of $1.05-$1.12; that's slightly better than prior guidance of $1.02-$1.12, and in-line with a $1.09 consensus. Including Domenick's, guidance now stands at $0.93-$1.
- 2013 free cash flow guidance is now at $600M-$650M vs. a prior $600M-$700M. Full-year capex guidance has been lowered to $850M-$875M from a prior $900M-$950M. No buybacks took place in Q3.
- Same-store sales (exc. fuel) rose 1.9% Y/Y in Q3, and are now expected to see full-year growth of 1.6%-1.9%; prior guidance was 1.5%-2%.
- SWY +5.5% AH. CC about to start.
- Q3 results, PR
Jun. 12, 2013, 4:42 PM
More on Safeway: The sale will net Safeway C$4B ($3.9B) in cash after taxes and expenses. $2B of the proceeds will be used to pay down debt, and most of the rest on buybacks. Canada Safeway had revenue of C$6.7B, operating profit of C$428M, and EBITDA of C$544M over the 12 months ending March 23. Safeway suggests "the higher multiples attributed to Canadian supermarket companies" contributed to its decision. The deal is expected to close in Q4, assuming regulatory approval. CC underway (webcast). SWY +32.2% AH. (PR)| Jun. 12, 2013, 4:42 PM | 1 Comment
Jun. 12, 2013, 4:20 PM
Apr. 12, 2012, 11:03 AM
Nov. 9, 2011, 2:03 PM
Already having a big year, dealmaking in the grocery business is set to jump even more as regional players seek to size up. One firm on the radar screen is Supervalu (SVU), primed for acquisition or break-up as it tries to shed debt from its $12.4B purchase of Albertsons in 2006.| Nov. 9, 2011, 2:03 PM