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EXHIBIT 99.4
Safeway and Randall's Announce Merger
Pleasanton, Calif./Houston, Texas--July 23, 1999-- Safeway Inc. (NYSE:SWY) and
Randall's Food Markets, Inc. jointly announced today they have signed a
definitive merger agreement pursuant to which Safeway will acquire Randall's for
total consideration of approximately $1.8 billion. Safeway will pay
approximately $1.425 billion for the equity of Randall's, using approximately
$855 million in cash and approximately 10.9 million shares of Safeway common
stock, and will assume or repay approximately $375 million of Randall's debt.
The combined company will operate more than 1,645 stores in 19 states in the
U.S. and in Western Canada, with pro forma 1999 estimated annual sales of
approximately $30 billion. It will employ more than 183,000 people.
The acquisition will be accounted for as a purchase, and the cash portion is
expected to be funded initially with a combination of bank debt, commercial
paper, and public debt. It is expected to be cash accretive this year, to be
neutral to Safeway's reported earnings in the first 12 months, and to be
additive to earnings thereafter.
The transaction was unanimously approved by the directors of Randall's who are
unaffiliated with Kohlberg Kravis Roberts & Co. (KKR) and by a special committee
of Safeway's Board of Directors, consisting of three outside directors who are
not affiliated with KKR. The independent directors of Randall's retained their
own legal and financial advisors. An affiliate of KKR, which owns approximately
62 percent of the outstanding shares of Randall's, and members of the Onstead
family, who own approximately 21 percent of Randall's outstanding shares, have
agreed to vote their shares in favor of the merger.
"This transaction is a wonderful opportunity for Safeway to continue its growth
strategy, and we are thrilled to be re-entering the fast growing Texas market
with such a high quality operation," said Steve Burd, Chairman, President and
CEO of Safeway. I have great respect for Randall Onstead, and welcome him to the
Safeway management team. Under his leadership, Randall's has continued to
improve its reputation as a high quality food retailer in Texas. The company has
strong positions in its market areas, and a superb management team. We are very
excited about the prospects for our combination."
"This is a great step for our companies, employees, and customers," said R.
Randall Onstead, Jr., Chairman and Chief Executive Officer of Randalls. "Safeway
has an established track record of successfully integrating operations to create
value, and they share our philosophy of doing business. Given the consolidation
driving the supermarket industry, and Randalls consistent excellent performance,
we feel this transaction represents an exciting opportunity to continue to build
our franchise in line with the history of quality and excellence that has always
characterized our stores. As a member of the Safeway team we will have an even
larger base of financial strength, buying power, best practices, and successful
private brands from which to grow. Our customers will continue to see the
Randalls and Tom Thumb banners on our stores and will benefit greatly from this
new partnership. I could not be more pleased with this merger."
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"Safeway and Randall's are an ideal match and we are delighted they will have
the opportunity to work together as one organization," said James H. Greene,
Jr., a KKR partner. "This is a strategic merger that extends Safeway's reach and
gives Randall's the critical mass to build its business in an increasingly
competitive environment. These are two of the finest companies in the
supermarket industry, and we are proud to be associated with them."
The merger is conditioned on the approval of a majority of Randall's outstanding
shares, expiration of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvement Act, and other customary closing conditions. Safeway and
Randalls plan to complete the transaction during the third quarter of this year.
Randall's Food Markets, Inc. a privately owned 116 store Texas-based supermarket
chain with annual net sales of approximately $2.6 billion, operates 46 Randalls
stores in the Houston area, 12 stores in Austin and 58 Tom Thumb stores in the
Dallas/Ft. Worth area. The company employs more than 18,000 associates.
Safeway Inc. is one of the largest food and drug retailers in North America
based on annual sales of over $27 billion. The company currently operates 1,529
stores in the United States and Canada, and currently has approximately 165,000
employees. In addition to contributions to food banks totaling $50 million over
the last five years, the company is a national sponsor of the Easter Seal
Society, and has raised over $60 million to help people with disabilities since
1986. The company is also a major supporter of education, contributing nearly
$20 million to schools in its market areas annually. The company's common stock
is traded on the New York Stock Exchange under the symbol SWY.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements relate to proforma sales, sources of
financing and future earnings and are indicated by words or phrases such as
"estimated", "expected" and similar words or phases. These statements are based
on Safeway's current plans and expectations and involve risks and uncertainties
that could cause actual events and results to vary significantly from those
included in or contemplated or implied by such statements. Please refer to
Safeway's reports and filings with Securities and Exchange Commission for a
further discussion of these risks and uncertainties.
Contact:
Safeway Inc.
Melissa Plaisance, 925/467-3136 (Analysts)
Debra Lambert, 925/467-3267 (Media)
or
Randall's Food Markets, Inc.
Mike Calbert, 713/268-3698 (Analysts)
Kathy Lussier, 713/268-3652 (Media)
or
KKR
Kekst and Company
Ruth Pachman, 212/521-4891
Josh Pekarsky, 212/521-4877