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Albertsons, Safeway to Divest 168 Stores in Advance of Merger

AB Acquisition LLC, parent of Albertsons, and Safeway Inc. have agreed to sell 168 stores to four separate buyers as part of the companies' $9 billion merger agreement, first announced in March and set to close in January 2015.

Haggen will purchase the majority, with 146 stores across Arizona, California, Nevada, Oregon and Washington; Associated Wholesale Grocers (AWG) / Minyards will buy 12 stores in Texas; Associated Food Stores (AFS) will purchase eight stores in Montana and Wyoming; and Supervalu will purchase two in Washington. All divestures are subject to approval by the Federal Trade Commission (FTC).

Per the terms of the agreements, the four buyers will acquire the stores, equipment and inventory, and they intend to hire "most, if not all, of the store employees" upon the closing of the deals, according to a press release.

"We're pleased to have found strong buyers for these stores and to have completed this important step toward combining Albertsons and Safeway," said Safeway President/CEO Robert Edwards, who will serve as the combined company's president/CEO following the merger's closing.

With Haggen's expansion from 18 to 164 stores as a result of the deal, retailer-owned grocery co-op Unified Grocers has signed on as a primary supplier for Haggen stores in California, Nevada and Arizona. Set to be co-led by CEOs John Clougher and supermarket industry veteran Bill Shaner, the Bellingham, Wash.-based retailer also tapped Supervalu as its primary supplier of products and wholesale services to the 64 stores in Oregon and Washington - 46 stores Haggen plans to acquire as well as the 18 existing stores.

Unified also said its Market Centre subsidiary will supply specialty products to Haggen, in a deal that represents $750 million in annual new business for the Commerce, Calif.-based wholesaler. The conversion to Haggen store management will begin early February 2015, during which time plans will commence to rebrand the stores as Haggen Northwest Fresh.

Pleasanton, Calif.-based Safeway operates stores under its flagship banner, as well as Vons, Pavilions, Randalls, Tom Thumb and Carrs. The company has 1,326 stores in 20 states and the District of Columbia, 13 distribution centers and 19 manufacturing plants, and employs approximately 138,000 employees.

AB Acquisition LLC operates ACME, Albertsons, Jewel-Osco, Lucky, Shaws, Star Market and Super Saver, as well as stores under the United Family, Amigos, Market Street and United Supermarkets brands. The company operates 1,081 stores and 14 distribution centers in 29 states and employs approximately 115,000 associates.

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