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Safeway bites into Texas
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July 23, 1999: 12:14 p.m. ET
Grocery chain buys Randall's; deal seen boosting total annual sales to $30B
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NEW YORK (CNNfn) - Safeway Inc. sunk its teeth a little deeper into the Texas market Friday, agreeing to acquire local grocery chain Randall's Food Markets Inc. in a cash, stock and debt deal valued at approximately $1.8 billion.
Safeway, the nation's second-largest food and drug store chain, said it will pay roughly $855 million in cash and issue about 1.9 million shares for Randall's, which operates 116 stores in the Houston, Austin and Dallas/Ft. Worth areas and generates annual net sales of $2.6 billion.
In addition, Safeway will assume or repay roughly $375 million of Randall's debt.
Combined, the two stores will boast a North America network of nearly 1,650 stores in 19 U.S. states and Western Canada with annual sales of roughly $30 billion.
Safeway officials said the deal will have no impact on the company's earnings during the next 12 months and will be accretive thereafter.
The deal has already been approved by Randall's board members who are unaffiliated with Kohlberg Kravis Roberts & Co., a powerful New York investment bank that owns approximately 62 percent of Randall's outstanding shares. An additional 21 percent of Randall's equity is owned by the Onstead family, including the company's chairman and CEO, R. Randall Onstead Jr.
Safeway (SWY) shares rose 2 to 52-3/4 in mid-day trading. 
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Safeway Inc.
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