SUPERVALU and CVS, the American retailers, have joined an investment consortium led by Cerberus Capital Management, the private equity firm, to buy Albertsons, the troubled American supermarket chain, in a $17.4 billion (£9.75 billion) deal.
The cash, stock and debt deal, which is subject to shareholder and regulatory approval, will give Supervalu a national presence and take CVS into the Midwest.
Albertsons’ shareholders will receive $20.35 in cash and a fixed exchange ratio of 0.182 share of Supervalu stock for each of their shares if the deal goes through, equivalent to a total $26.29 a share.
Shares in Albertsons, which is one of the world’s largest food and drug store retailers, with 2,500 stores in 37 American states, rose 4.31 per cent or $1.04 to $25.15 yesterday.
After the deal, which is expected to be finalised in the summer, about 65 per cent of Supervalu will be held by existing shareholders and the rest by Albertsons’ investors.
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Supervalu will acquire the operations of Shaw’s Supermarkets, a business once owned by J Sainsbury, the British supermarket, as well as Acme Markets, Bristol Farms, Jewel-Osco, Star Markets and some Albertsons stores.
CVS will acquire about 700 SavOn and Osco “drug stores”, or American chemists/convenience stores.
The other purchasers — led by Cerberus, Kimco Realty, the property investment trust, and Schottenstein Stores — will acquire shops in Dallas, California, Florida, the Rocky Mountains and the Southwest. The group plans to operate under the Albertsons name.