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The Cincinnati Business Courier that there are rumors about another possible suitor for Safeway, now that the California-based supermarket chain is considering a sale of the company. Kroger, the country's largest supermarket retailer, is being mentioned as a possible buyer, mostly because it is seen as having the financial wherewithal to make such a deal.

However, the story also notes that such a purchase could hit major regulatory potholes, since there are markets such as Southern California where they compete head-to-head. In addition, it is described as unusual for a company to make acquisitions back-to-back, and Kroger has just completed a purchase of Harris Teeter, a much smaller company that has not yet been absorbed into Kroger's organization.

Finally, the story says, "Kroger also might not be interested in buying a company whose operations haven’t been up to snuff. Safeway’s market capitalization has declined and its fourth-quarter earnings fell by about half. Its same-store sales growth is nowhere near that of Kroger."
KC's View:
I'm hardly an expert at such things, but this doesn't strike me as a very strong possibility. Maybe Kroger would be interested in a piece here or there, but not the whole thing. On the other hand, if such rumors make Safeway a more expensive purchase for a company that might acquire it and end up competing with Kroger, it wouldn't be unhappy.