Supermarkets Ring Up Merger
Supermarket giant Safeway Inc. said Tuesday that it will gain access to the Chicago market by buying Pleasanton-based Dominick's Supermarkets for about $1.2 billion plus debt.
Safeway (SWY) will pay $49 a share for all 24.5 million outstanding shares of Dominick's (DFF) and will assume $646.2 million in debt.
Safeway dipped 9/16 to 40 7/8 Tuesday morning. Dominick's gained 6 9/16, about 16 percent, to 47 15/16.The combined company will operate more than 1,490 stores in 18 states in the U.S. and in western Canada, with pro forma 1998 estimated annual sales over $26.5 billion, the companies said in a press release.
The acquisition is expected to be neutral to Safeway earnings in the first year, and be additive to earnings in the second year.
"Dominick's has established an enviable reputation as a leading retailer in the Chicago region," Steve Burd, Safeway CEO said in a statement.
Safeway Inc. is the second biggest food and drug retailer in North America, based on sales, with 1,381stores.
"Safeway has an established track record of successfully integrating operations to create value for both customers and shareholders," said Robert Mariano, Dominick's CEO.
Written By Steve Gelsi