New York City, Albertson’s has agreed to be sold to a group of buyers led by SuperValu Inc. and CVS Corp. for about $9.5 billion in stock and cash, ending an intense auction that only weeks before had fallen apart. The group, which also includes Cerberus Capital Management LP and Kimco Realty Corp., will split the company into three parts.
The deal is a significant leap forward for Eden Prairie, Minn.-based SuperValu, which will shoulder most of the transaction and become the second-largest supermarket company in the United States after Kroger. Under the terms of the agreement, SuperValu said it would buy 1,124 stores from Albertson’s for an estimated $12.4 billion in cash and stock. The amount includes $6.1 billion of Albertson’s debt.
CVS, for its part, will buy 700 freestanding Sav-On and Osco pharmacies and a distribution center from Albertson’s for $2.93 billion. The investor group led by hedge fund Cerberus Capital Management and including Kimco Realty, Schottenstein Realty, Lubert-Adler Partners and Klaff Realty will buy 655 Albertson’s and Super Saves stores and a number of distribution centers. The group plans to operate the stores under the Albertson’s name.
The deal values Albertson’s at $26.29 a share, a 9% premium based on Friday’s closing stock price. The total transaction value is estimated at $17.4 billion, including debt.
The boards of SuperValu, CVS and Albertson’s, as well as the investment committees or equivalents of the Cerberus-led group, have approved the transaction.