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Safeway stores nationwide acquired by Cerberus Capital Management

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What had long been rumored became reality on Thursday.

Safeway Inc, the second-largest U.S. grocery store chain, said private equity firm Cerberus Capital Management will the company for $9.4 billion.

No word on the fate of the unions representing Safeway employees.

The offer price of $40 per share represents a premium of 1.3 percent to Safeway's Thursday closing stock price of $39.47 on the New York Stock Exchange.

The massive acquisition will combine Cerberus, an investor in supermarket chains, with the Albertsons chain, creating a dominant grocery franchise on the West Coast. The grocery chain will now become a network of more than 2,400 stores and 250,000 employees.

To all employees caught in the mega deal, Cerberus announced no store closures are expected.

Safeway shareholders will receive $32.50 per share in cash plus other distributions with a value of $3.65 per share.

Last March, a Cerberus-led investor group acquired Supervalu Inc, including Albertsons and Jewel-Osco, for $3.3 billion.

The grocery industry now faces the issue of union control of the employees.

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