Albertson's Confirms Sale for $17 Billion

CINCINNATI -- After about two months of negotiations, the board of Albertson's Inc. confirmed it will sell to a consortium that includes wholesaler and retailer Supervalu Inc. and CVS Corp. for a total of $17.4 billion, reported the Cincinnati Business Courier .

The purchasing consortium consists of Eden Prairie, Minn.-based Supervalu; CVS Corp. of Woonsocket, R.I.; New York-based investment fund Cerberus Capital Management and Hyde Park, N.Y.-based real estate investment company Kimco Realty, according to the newspaper.

The store banners being acquired by Supervalu will include Acme Markets, Bristol Farms; Jewel-Osco, Shaw's Supermarkets, Star Markets and Albertson's. The deal also includes the combined grocery-pharmacy stores under the Osco and Sav-On franchises, the Cincinnati Business Courier reported.

The acquisition will triple Supervalu's retail operations, making it the second-largest grocer in the United States with 2,656 stores, behind Cincinnati-based Kroger with more than 3,700 grocery, warehouse, jewelry, and convenience stores. The company is expected to have combined sales of $44 billion.

CVS is acquiring 100 percent of Albertson's stand-alone drugstore business, which includes approximately 700 freestanding stores as well as a distribution center located in La Habra, Calif. The stores will be re-bannered as CVS, according to the report.

The consortium made a $9.6 billion offer for Albertson's in December, but the grocery chain's board rejected the bid. The new deal reportedly includes a revised structure intended to ease antitrust concerns, the newspaper reported.