Supervalu completes sale of five chains to Cerberus-led investor group

New York -- Supervalu on Thursday announced the completion of the sale of its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition LLC, an affiliate of a Cerberus Capital Management-led investor consortium. The stock deal is valued at $3.3 billion, including $100 million in cash and $3.2 billion in debt assumption.

With the transaction complete, Supervalu now consists of three business units made up of Independent Business, a leading food wholesaler which serves nearly 2,000 stores across the country; Save-A-Lot, the largest hard discount grocery chain in the United States with more than 1,300 stores; and five retail banners: Cub, Farm Fresh, Shoppers, Shop ‘n Save and Hornbacher’s.

“As we move forward, Supervalu will continue as one of the largest wholesale grocery providers in America serving nearly 2,000 independent retailers in 43 states; we plan to continue growing our hard discount Save-A-Lot format that includes over 1,300 stores nationwide; and we will operate five, strong regional retail banners.” said Sam Duncan, Supervalu president and CEO.

With the close of the transaction, Robert Miller, president and CEO of Albertsons LLC, becomes Supervalu's new non-executive chairman replacing Wayne Sales, who has served as executive chairman since August 2012. Supervalu also announced that Sales will remain on the board as a director along with four other current board members — Donald Chappel, Irwin Cohen, Philip Francis and Matthew Rubel. As previously agreed upon by Supervalu and Symphony Investors, five directors voluntarily resigned from the board effective Thursday, including Ronald Daly, Susan Engel, Edwin “Skip” Gage, Steven Rogers and Kathi Seifert.

As part of the transaction, Supervalu also announced that Symphony Investors, a Cerberus-led investor consortium, completed its tender offer resulting in the acquisition of 11.7 million shares at a purchase price of $4.00 per share in cash. In addition, pursuant to the terms of the transaction, the company issued 42.5 million new shares of common stock (approximately 19.9% of the outstanding shares) to Symphony Investors at a purchase price of $4 per share in cash to the company, or approximately $170 million. The tender offer and primary stock issuance establish Symphony Investors as Supervalu's largest shareholder with 21.2% of total outstanding common shares.