Safeway Stores, Pleasanton, Calif., said it agreed to merge with Northlake, Ill.-based Dominick's Supermarkets in a transaction valued at $1.2 billion. The merger creates a grocery retailer with 1,490 stores in 18 states and $26.5 billion in sales. The merger gives Safeway a stronghold in Chicago, where Dominick's, a $2.6 billion company with 112 stores, goes head-to-head with Jewel Food Stores. The merger of Jewel's parent, Amercican Stores, with Albertson's earlier this year created the country's largest food chain with $36.5 billion in sales and 2,470 stores. Safeway's agency is McCann-Erickson Worldwide, San Francisco, while Dominick's is handled by BBDO
Copyright October 1998, Crain Communications Inc.