If Safeway has it its way, we could be seeing a billion dollar sale in the next coming months. The Financial Times revealed that Safeway executives had hired Eastdil Secured to round up prospective buyers for its shopping center development business, which acquires land on which to build retail shopping centers in which Safeway acts as the anchor tenant. The price? $1 billion.
A sale of this magnitude would fit into the overall economic strategy Safeway has employed since finalizing its acquisition by Albertsons earlier this year for $9 billion.
Last month when Safeway successfully negotiated a $5 billion deal in which it turned over control of its Canadian chain of stores to Sobey's, Safeway CEO Robert Edwards revealed in a press release that he thought that the revenue generated by this sale would allow Safeway to pay down its debts and improve the general outlook of its balance sheets as it approached its merger with Albertsons.
"The substantial cash proceeds from this transaction will allow us to create value for Safeway stakeholders and contribute to the growth of the ongoing business," said Edwards.
One can only assume that this latest move was driven by similar motivations.
Sources who spoke with the Financial Times also suggested that Safeway would be seeking out buyers for its Mexican business operations in the near future.
Between the two of them Safeway and Albertsons control a total of 2,300 grocery stores. Once their partnership finalizes, Cerberus, the private equity investor which owns Albertsons, will have command of the 3rd largest grocery store chain in the United States.
Stay tuned to DeliMarket TV for any updates in this developing story.