Watch CBSN Live

Safeway selling stores in Canada

NEW YORK Safeway Inc. (SWY) says it's selling its supermarket operations in Canada to Sobeys Inc., a Canadian food retailer, for C$5.8 billion ($5.7 billion).

Sobeys, a unit of Empire Co. Ltd., said the deal includes the purchase of 213 grocery stores under the Safeway banner in western Canada, 12 manufacturing facilities and four distribution centers.

Safeway, based in Pleasanton, Calif., has about 1,400 stores in the U.S. It said proceeds will be used to pay down debt and buy back stock. It also said some of the proceeds may be used to invest in "growth opportunities."

The transaction is expected to close in the fourth quarter and is subject to regulatory approvals.

Safeway shares rose $7.14, or 31 percent, to $30.25, in after-hours trading.

View CBS News In