UFCW Local 5 Safeway Member Update
Safeway Takeover Talks
On Wednesday, February 19, Safeway announced the company was participating in takeover talks. Although the grocer is not naming the other party or parties to the talks the press is speculating that private equity firm Cerberus is the involved party. Private equity firms use money they borrow from other sources to take control of companies viewed as economically troubled or undervalued. Generally speaking, takeover companies put the targeted firms back on their feet or sell them, usually in pieces, to pay off their investors. Cerberus’ track record on buyouts is mixed.
This is not the first time the union has dealt with Cerberus and it isn’t the first time Safeway has been the target of a hostile takeover. Cerberus purchased Albertsons in 2006 and Kohlberg, Kravis and Roberts (KKR), a Wall Street takeover firm, purchased Safeway in 1986.
If a takeover does take place and a private equity firm takes over Safeway the sale will start a sequence of events mandated by the contract and the law. Issues such as employee retention, seniority, pension obligations and many other have to be worked out with the company. This may take some time. You will be kept up to date at every step of the process.
The Cerberus takeover of Albertsons did not go well and all efforts will be made to make sure history does not repeat itself at Safeway.
The union is monitoring this situation carefully and will take all actions necessary to protect the interests of the membership.
Click here to listen to the phone message by President Ron Lind sent to our members working at Safeway.