Big Aust. chains to merge

Press, 17 August 1985, Page 25

Big Aust. chains to merge

NZPA-AAP Sydney Woolworths, Ltd, will merge its retail activities with the Australian operations of the United States retail group. Safeway Stores, Inc., following its planned acquisition of Safeway Australia. The merger plan was announced after a $l2O million deal had been hammered out between the two companies giving Safeway a 19.9 per cent stake in Woolworths in return for control of Safeway's Australian operations passing to Woolworths.

As part of the agreement, Woolworths corporate affairs general manager, Mr John Lee, said a new company, Woolworths-Safeway (Victoria), Ltd, would be created to combine the Victorian operations of the two companies' supermarket and food businesses.

As well, Safeway’s New South Wales and Queensland operations would be combined with Woolworths’ supermarket and food businesses operating in these states, Mr Lee said. Safeway, with 124 stores in Victoria, New South Wales and Queensland, had sales totalling S9B6M in the year to September 1984 and employed more than 12,000 people. The merger is expected to strengthen Woolworths’ presence in Victoria, where it has . been historically underrepresented. On a national basis, the combined Woolworths-Safeway conglomerate will be Australia’s second largest retailer after the planned Coles-Myer group to be formed out of the merger of G.J. Coles and the Myer Emporium, announced last week.

It will have about 10 per cent of the national retail market, compared with about 20 per cent held by the ColesMyer group. Safeway is one of the world’s largest retailers, with sales totalling $U519.64 billion in 1984