Safeway shareholders are expected to receive a total of $40 per share, valuing the business at over $9bn.
The deal value represents a premium of 72 per cent from one year ago, and 56 per cent over the share price six months ago.
Last month it was reported that Cerberus was in talks with Safeway about a possible takeover.
Last year a Cerberus-led consortium agreed to buy a clutch of assets from US grocery giant Supervalu in a deal valued at $3.3bn.
Co-head of global private equity at Cerberus Lenard Tessler said, “Albertsons has successfully transformed underperforming retail grocery stores into strong performers by focusing on enhancing the local customer experience.
“Similarly, Safeway has consistently provided outstanding value and customer service throughout the communities it serves.
“Combining these strong management teams will strengthen the ability of Safeway and Albertsons to deliver on a shared commitment to offering customers higher quality products at lower prices, which will undoubtedly yield positive results for all stakeholders in the business.”
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