Safeway shareholders approve Albertsons merger

In a move that could have far-reaching implications for the Tri-Valley, Safeway shareholders voted overwhelmingly Friday to approve the acquisition of the Pleasanton-based supermarket chain by an affiliate of Albertsons, another national supermarket firm that has its corporate headquarters in Boise, Idaho.

The Safeway shares were bought by AB Acquisition, which owns the Albertsons chain and is controlled by Cerberus Capital Management LP.

The $9 billion deal transaction, first announced in March, is expected to close by the end of the fourth quarter, subject to customary closing conditions and regulatory approval.

According to Safeway, 70% of the outstanding shares and 96% of the shares voted were in favor of the acquisition.

Shareholders also approved a non-binding advisory proposal to approve a merger-related compensation plan for Safeway’s top-level executive officers, and they voted down two other measures, in line with recommendations by the board of directors: 90% said no to a proposal to label products containing genetically modified ingredients, and 88% voted against extending producer responsibility.

Pending any divestitures that might be required by the Federal Trade Commission, the merger with Safeway will give Albertsons close to 2,400 stores, including approximately 1,300 from Safeway, with total sales approaching $60 billion.

Safeway Inc. has been a Fortune 100 company and one of the largest food and drug retailers in North America based on sales. Last year, the company operated 1,331 stores in the U.S. and had annual sales of $36.1 billion.

Safeway has had an 18-year presence in Pleasanton since 1996 and has been a major contributor to the city’s employment and municipal tax base.

The company also is one of Pleasanton’s largest employers, with approximately 2,600 employees between the local grocery stores and the headquarters operations. The company has a long history in the East Bay and was previously based in Oakland for many years.

“We understand that part of running a very successful enterprise means making a business decision that’s best for the company,” said City Manager Nelson Fialho when the transaction was first announced. “Given (the) announcement of the sale of Safeway, it is too early to know what that means for Safeway, or for Pleasanton.”

“It is our hope that Safeway, or a new version of the company, will remain an active member of the Pleasanton business community, and continue to be a place of employment for many of our residents.”

The companies said they expect administrative cost savings, but don’t expect to close any stores.

Under the acquisition agreement, Safeway president and CEO Robert Edwards will become president and CEO of the combined company, while Bob Miller, the current CEO of Albertsons, will become executive chairman.