Safeway Inc. (NYSE:SWY) and Genuardi’s Family Markets, Inc. jointly announced today that they have signed a definitive agreement pursuant to which Safeway will acquire Genuardi’s in a cash transaction.
The acquisition will be accounted for as a purchase and is expected to be funded with proceeds from the sale of commercial paper. Safeway expects the transaction to be accretive in 2001.
After the acquisition, Safeway will operate over 1,700 stores in 21 states in the U.S. and in Western Canada, with pro forma 2000 estimated annual sales of approximately $33 billion. The company will employ more than 200,000 people.
The transaction was unanimously approved by the Board of Directors of Genuardi’s Family Markets and by Safeway’s Board of Directors, and has been unanimously approved by the holders of Genuardi’s voting stock.
“This transaction represents an excellent opportunity for Safeway to continue its growth strategy, and we are thrilled to be reinforcing our position in the fast-growing Mid-Atlantic market with such a high quality operation,” said Steve Burd, Chairman, President and CEO of Safeway.
“We have great respect for the Genuardi family. Under their leadership, Genuardi’s has continued to strengthen its reputation as an innovative food retailer and market leader in the region. We are very excited about the prospects for Genuardi’s.”
“This is a tremendous step into the future for Genuardi’s, our employees and our customers,” said Charles A. Genuardi, Chairman, President and CEO of Genuardi’s Family Markets.
“This transaction will allow us to gain the resources of a world class supermarket company known for innovation and leadership in meeting the needs and expectations of its customers.
“We are proud of our 80-year history of commitment to customers, employees and the communities we serve, and we are confident that this transaction will enable Genuardi’s to carry on that legacy. Our customers will continue to see the Genuardi’s name on our stores and will benefit greatly from what Safeway will bring to our operation.”
The Genuardi’s operations will be led by Hank Mullany, currently Executive Vice President and Chief Operating Officer of Genuardi’s.
The transaction is conditioned upon the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. Safeway and Genuardi’s expect to complete the transaction in the first quarter of 2001.
