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Safeway Company Essay

530 Words3 Pages

America’s second largest grocery store chain has announced its plans for initial public offering (IPO). According to the reports, its private equity owner might be on the verge of a huge pay-out, but the firm might not cash out of the venture just yet. The IPO Plans The company filed for the IPO after it merged with Safeway Inc. earlier this year. It is part of the string of deals in the US. Struggling grocery chains have had to look for new strategies by merging with other companies as the competition in the sector heats up. The price banks will set for the IPO is still unknown. According to the Wall Street Journal, the company’s placeholder says it hopes to raise around $100 million with the IPO, but the newspaper believes this won’t be the final …show more content…

When the private equity firm got involved with the company, Albertson had a market share of 0.4%. The deal valued the company at $17.4 billion. The PE firm took an aggressive approach to managing the company and the chain managed to expand its national reach. It closed nearly two-thirds of Albertson’s stores and sold off much of its real estate to pay off the company’s debt. Later on, the firm also focused on expanding the company through a number of mergers. In 2013, it bought NAI from SuperValu and further acquired United, a Texas-based grocery chaing. As mentioned above, the company finalised its deal to buy Safeway earlier this year in a deal worth $9.4 billion. Overall, the private equity firm together with the management team at Albertson have managed to turn around the chain. Moody’s Investors Service Analyst, Mickey Chadha, was quoted in the Wall Street Journal stating, “Management has a good handle on what the customer wants. Keeping the operations localized allows them to be more nimble and shift to consumer preferences in certain

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