Safeway Selling Canadian Stores To Empire Company (SWY)
Empire Company Ltd., which owns the Canadian grocery chain Sobeys, will be purchasing the Canadian operations of Safeway Inc. (SWY) for $5.8 billion CDN. The deal will involve Empire acquiring substantially all of Canada Safeway Inc.’s assets, including 213 full-service grocery stores, nearly 200 in-store pharmacies, over 60 gas stations, as well as a handful of liquor stores, distribution centers and manufacturing facilities.
Safeway Inc. is a giant in the North American grocery space, but most of its retail grocery operations in Canada are on the Western side of the country. The president and CEO of Safeway Inc., Robert Edwards, had the following to say about the deal: ”We are pleased to enter into this agreement with Sobeys in order to realize the higher multiples attributed to Canadian supermarket companies. 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.”
Safeway’s shares were slightly lower today, but the announcement was not released until after 4:oo PM. SWY’s shares are almost 19% off their 52-week high.
The Bottom Line
Shares of Safeway Inc. (SWY) have a yield of 3.46%, based on Wednesday’s closing price of $23.11.
Safeway Inc. (SWY) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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