FTC Clears Safeway-Albertsons Merger -- Update

By Brent Kendall 

WASHINGTON--WASHINGTON The U.S. Federal Trade Commission on Tuesday cleared the merger of supermarket operators Safeway Inc. and Albertsons after the companies agreed to sell 168 stores to address the commission's competition concerns.

The merger, announced in March, was valued at about $9.4 billion. Safeway and privately held Albertsons announced the store-divestiture plan last month. The stores will go to four FTC-approved buyers.

The companies said that with antitrust clearance in place, they expect to complete the merger within the next five business days.

The FTC said that without the store sales, the merger would have lessened competition in 130 local markets where the two chains compete head-to-head. Those markets are in Arizona, California, Montana, Nevada, Oregon, Texas, Washington and Wyoming.

The supermarket operators had argued that combining their distribution and purchasing efforts would produce cost savings that could be directed toward store improvements and lower prices. The deal would create a larger competitor to Kroger Co., the biggest U.S. grocery-store chain.

Albertsons is privately owned by an investor group led by Cerberus Capital Management LP. Safeway will be delisted when the merger closes.

Write to Brent Kendall at [e-mail]

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